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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16857 \ January 8, 2001

UNITED STATES OF AMERICA v. MARK SIMEON JAKOB, CR 00-1002-DT (C.D. Cal.)

The Commission and the United States Attorney for the Central District of California announced that on December 29, 2000, Mark Simeon Jakob pleaded guilty to two counts of securities fraud and one count of wire fraud for creating and distributing over the Internet a fake press release concerning Emulex Corp., a high-tech company based in Southern California. The phony release, which was issued on August 25, 2000, falsely stated that the company's chief executive had resigned, that its earnings were to be restated and that it was under investigation by the Commission. The fraudulent release caused the company's stock to plummet nearly $61 a share in just 16 minutes, resulting in $2.2 billion in lost market capitalization and $110 million in losses to investors. As a result of his scheme, Jakob profited by more than $240,000. The guilty plea, entered in federal district court in Los Angeles, subjects Jakob to a maximum prison term of 25 years, a maximum fine equal to two times the $110 million in investor losses and an order of restitution up to $110 million payable to the victims of his scheme. In the Commission's civil action filed last August, a federal judge entered a temporary restraining order, a preliminary injunction and an asset freeze against Jakob, freezing approximately $400,000 of his assets. That action, seeking a permanent injunction, disgorgement and civil penalties, is still pending.

http://www.sec.gov/litigation/litreleases/lr16857.htm


Modified:01/09/2001