U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16679/September 6, 2000
SECURITIES AND EXCHANGE COMMISSION v. THOMAS CARTER, Civil Action No. CV 00-09457 GHK (SHX) (C.D. Cal.)
The Securities and Exchange Commission ("Commission") announced today that it filed an enforcement action in federal district court in Los Angeles, California against Thomas Carter ("Carter"), a 27-year old resident of Santa Barbara, California. The Commission alleges that Carter manipulated the securities of four companies in May and June of 1999 and that, as a result of his trading in the stocks that he manipulated, Carter made a profit of $12,816.47. This action is part of the fourth nationwide Internet fraud sweep conducted by the Commission since October 1998.
The complaint alleges that Carter disseminated tens of thousands of e-mails, entitled the "Unity List" e-mails, which contained materially false information regarding certain profiled companies in which Carter had recently purchased stock. The complaint further alleges that the false information concerned purported pending announcements by the profiled companies and information regarding the timing of Carter's purchases and sales of the securities of the profiled companies. The complaint further alleges that the trading volume and the stock price of each of the four companies rose dramatically immediately following Carter's dissemination of the e-mails, at which time Carter sold all of his stock in the companies at a profit.
The Commission seeks an injunction, civil penalties and disgorgement with prejudgment interest against Carter for violating the antifraud provisions, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm . For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm . To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. For a description of other SEC enforcement actions involved in this Internet Market Manipulation Sweep, visit http://www.sec.gov/news/extra/intmm.htm.