Litigation Release No. 17493 / April 29, 2002
SEC v. Invest Better 2001, Cole A. Bartiromo, and John/Jane Does 1-10, 01 Civ. 11427
(BSJ)(S.D.N.Y. filed January 7, 2002)("IB2001")
SEC AMENDS COMPLAINT, ADDS CHARGES THAT COLE A. BARTIROMO, A 17 YEAR OLD, ENGAGED IN AN INTERNET PUMP AND DUMP SCHEME.
The Securities and Exchange Commission ("Commission") announced that it filed a second amended complaint today in SEC v. Invest Better 2001, Cole A. Bartiromo, and John/Jane Does 1-10, 01 Civ. 11427 (BSJ)(S.D.N.Y. filed January 7, 2002)("IB2001") alleging additional violations by Cole A. Bartiromo ("Bartiromo") of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder.
In its first amended complaint, filed January 7, 2002, the Commission alleged that Bartiromo raised more than $1 million from more than 1,000 investors through a scheme known as Invest Better 2001 ("IB2001"), which purportedly offered "guaranteed" and "risk free" investments programs in which IB2001 pooled investors' funds to bet on sporting events, and promised to repay investors between 125% and 2500% of their principal within specified periods ranging from three days to several weeks.
The second amended complaint, filed today, additionally alleges that Bartiromo conducted an Internet pump-and-dump scheme that manipulated the stock price of fifteen publicly-traded companies. Specifically, the second amended complaint alleges that from approximately May 14, 2001 to July 5, 2001, Bartiromo disseminated numerous false and misleading messages concerning publicly-traded companies. The complaint further alleges that for each manipulation
Bartiromo purchased large blocks of stock, consisting in some cases of nearly 50% of the volume on that day, then posted thousands of identical false messages on Internet message boards, and subsequently sold his entire position. According to the second amended complaint,
Bartiromo posted over 6,000 messages and traded several million shares of the fifteen companies in this manner, and, as a result, generated a net profit of over $91,000.
The second amended complaint seeks, among other things, civil injunctive relief, disgorgement plus prejudgment interest and civil money penalties based on Bartiromo's additional violations.