UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16453 / February 24, 2000
SECURITIES AND EXCHANGE COMMISSION v. JAMES SHERET, JR. AND GLENN E. CONLEY, No. CIV 1411 (AGS) (USDC S.D.N.Y.)
The Commission announced that it obtained an order temporarily restraining James Sheret, Jr., of Bayside, New York, and Glenn E. Conley, of Portland, Oregon, from violating the federal securities laws and freezing their assets. The order was obtained in a previously announced action charging Sheret and Conley with sending numerous unsolicited "spam" e-mail messages to fraudulently manipulate the stock price of 57 thinly-traded companies. The Commission's complaint alleges that Sheret and Conley prepared the spams, under the banner "AOL Investment Snapshot," thus misrepresenting that the spams emanated from or were endorsed by America Online, Inc. The complaint further alleges that Sheret and Conley sold their personal holdings in the stocks immediately after sending the spams, realizing substantial profits.
The complaint alleges that in some instances the spams falsely implied that they were transmitted to the recipients by mistake. According to the complaint, the spams further stated that the stock prices of the touted companies had recently increased without disclosing that, in a number of instances, the price increases were due largely to Sheret's and Conley's stock purchases before the spams were sent.
These false and misleading statements were allegedly intended to induce buying in the stocks and raise their prices. Indeed, the scheme had this effect, allowing Sheret and Conley to sell their holdings into an artificially inflated market. The complaint alleges that Sheret and Conley have made profits of at least $309,705 and $21,990 through individual trading, respectively, and another $7,627 through trading in a joint account.
The complaint, filed in the U.S. District Court for the Southern District of New York, charges Sheret and Conley with violating Section 10(b) of the Securities Exchange Act of 1934 and seeks permanent injunctions, disgorgement and civil penalties.
The U.S. Attorney for the Southern District of New York today also filed a criminal complaint alleging that these two individuals conspired to and committed securities fraud.
The Commission appreciates the assistance provided by America Online, Inc. in this matter.