U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 16535 / May 3, 2000

SECURITIES AND EXCHANGE COMMISSION v. STEPHEN HOURMOUZIS AND WAYNE LOUGHNAN, Civ. No. 00-N-905 (USDC D. Colo.)

The Commission announced today that the Australian Securities and Investments Commission (ASIC) filed 19 criminal charges against two Australian residents relating to the transmission of spam e-mail messages and Internet message board postings in May 1999 touting the stock of Rentech, Inc., a Denver company. On May 2, 2000, ASIC announced that it charged two individuals, Stephen Hourmouzis and Wayne Loughnan, with interference with the lawful use of a computer and making false or misleading statements likely to induce the purchase of securities of Rentech.

The Australian criminal action follows the Commission's filing on May 1 of a civil action alleging that Hourmouzis and Loughnan violated United States' securities laws in touting Rentech stock. The Commission's complaint alleges that Hourmouzis and Loughnan sent between six and seven million e-mails to United States citizens, and others, and posted numerous messages on the message boards of Yahoo!, Raging Bull, and InsidetheWeb.com. The messages were masked and made to appear as though written by analysts. According to the Commission's complaint, the messages contained false statements, including that analysts predicted a 900% rise in Rentech's stock price and that Rentech had new, patented technology scheduled for release. The Commission alleges that the messages caused the price of Rentech's stock to double and trading volume to increase by 1,600 percent on May 10, 1999 and, as a result, Nasdaq halted trading. According to the complaint, Hourmouzis and Loughnan sold their stock in Rentech after disseminating the false information, realizing approximately $14,000 in profits. The Commission seeks disgorgement and a temporary and permanent injunction to prohibit Hourmouzis and Loughnan from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. For further information, see Litigation Release No. 16532 (May 1, 2000).

http://www.sec.gov/litigation/litreleases/lr16535.htm

Modified:10/23/2000