UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16537 / May 4, 2000
SECURITIES AND EXCHANGE COMMISSION V. MARK MALATESTA, INDIVIDUALLY AND DOING BUSINESS AS FINANCIAL SOLUTIONS WEB. Civil Action No. SACV-00-421GLT(Eex) (C.D. Calif., Southern Division)
The Securities and Exchange Commission today announced that it filed suit against Mark Malatesta, Individually and doing business as Financial Solutions Web ("FSW"), in the Central District of California. The SEC's complaint alleges that the defendant engaged in an Internet scheme in which he fraudulently touted the stock of two issuers.
The Commission's Complaint alleges Malatesta operated a web site called Financial Solutions Web, through which he recommended stock purchases of companies traded on the NASD OTC Bulletin Board. In connection with his recommendations, Malatesta made fraudulent statements about his, and FSW's background, including the false claims that two of FSW's clients were the California State Teachers Retirement System and the California Public Employee Retirement System retirement funds and that Malatesta was managing over $35 million dollars in client investments. Beyond misrepresenting his background and credentials, Malatesta failed to disclose that he was paid to tout the stock of the two issuers and, in fact, falsely denied that he was being paid to make his glowing comments about the stocks. Malatesta also used the alias SafeCents to tout the stocks on the Raging Bull and Silicon Investor bulletin boards. In response to inquiries by others on the bulletin boards, Malatesta misrepresented the nature of his compensation agreements with the two issuers.
As a result of his alleged misconduct, the Complaint charges the defendant with violating Sections 17(a) and (b) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and the Commission's Rule 10b-5. The Complaint seeks permanent injunctive relief against the defendant and civil monetary penalties.
Investors are advised to read the SEC's "Cyberspace" Alert before purchasing any investment promoted on the Internet. The free publication, which alerts investors to the telltale signs of online investment fraud, is available on the Investor Assistance and Complaints link of the SEC's Home Page on the World Wide Web www.sec.gov. It can also be obtained by calling 800-SEC-0330.
Investors are encouraged to report suspicious Internet offerings (or other suspicious offerings) via e-mail to firstname.lastname@example.org. A user friendly form to assist you in making a report is available at the SEC Home Page www.sec.gov. Investors can also mail a report to SEC's Enforcement Complaint Center, Mail Stop 8-4, 450 Fifth Street, N.W., Washington, D.C. 20549.