U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16913 / February 28, 2001
SEC v. Sunset Investment Group, Inc., James Brown, Pinnacle Capital Advisors, and Austin Tanner, Civ. No. 01-M-0358 (District of Colorado)
Today, the Commission sued Sunset Investment Group, Inc. ("Sunset"), James Brown, Pinnacle Capital Advisors ("Pinnacle"), and Austin Tanner in U.S. District Court (District of Colorado), for making false and misleading performance claims and testimonials appearing on three different websites, namely OptionInvestor.com, SplitTrader.com, and NetBulls.com, and in press releases. All three sites provide stock and market analysis and publish a stock advisory newsletter offering stock analysis, trading strategies, and trading recommendations and are operated by Sunset and its president and sole shareholder, Brown, a resident of Littleton, Colorado. Tanner, from Westchester, Illinois, and his company Pinnacle, were hired by Brown to create the homepages of the websites.
According to the Complaint, from at least October 1998 until May 2000, OptionInvestor.com posted misleading performance data on its homepage and in press releases, claiming returns ranging from 60% to 240% for subscribers who followed the trading philosophy and trading recommendations in its newsletter and its OEX index options service, the OEX Skybox. The Commission alleges that all of the performance claims were false and misleading because, even though they were hypothetical, the site indicated that the performance reflected actual results. Moreover, the calculations to determine the performance results were materially flawed and dependent on hindsight, making it impossible for subscribers to achieve similar results. The Commission also alleges that SplitTrader.com and NetBulls.com posted on their homepages from October 1999 until June 2000 false and misleading testimonials that praised the performance of the sites. The Commission claims that the testimonials were copied almost verbatim from the OptionInvestor.com homepage and had nothing to do with the performance of either SplitTrader.com or NetBulls.com. The Complaint also states that Tanner drafted, in collaboration with Brown, the false performance claims appearing on the OptionInvestor.com site and posted the false testimonials on the SplitTrader.com and NetBulls.com sites.
Without admitting or denying the allegations in the Complaint, Sunset and Brown consented to the entry of an Order that enjoins them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and orders them to pay a civil money penalty of $70,000.
This action is brought as part of the Commission's Fifth Internet Fraud Sweep. For tips on how to avoid Internet investment schemes, visit http://www.sec.gov/investor/pubs/cyberfraud.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 Fraud Sweep, visit http://www.sec.gov/news/press.shtml.http://www.sec.gov/litigation/litreleases/lr16913.htm