SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16391 / December 15, 1999
SEC AND U.S. ATTORNEY MOVE AGAINST ACCUSED MICROCAP STOCK MANIPULATORS; THREE SPREAD FALSE INFORMATION THROUGH INTERNET MESSAGE BOARDS
SECURITIES AND EXCHANGE COMMISSION v. ARASH AZIZ-GOLSHANI, HOOTAN MELAMED & ALLEN DERZAKHARIAN, U.S. District Court for the Central District of California, Civ. Action No. 99-13139 (CBM) (AJWX) (C.D.Cal. December 15, 1999)
The Securities and Exchange Commission today announced that it filed a civil action against three Southern California defendants -- Arash Aziz-Golshani, 23, of Beverly Hills, Hootan Melamed, 23, of Pomona and Allen Derzakharian, 26, of La Crescenta -- alleging that they participated last month in a scheme to manipulate the price of a stock by spreading false information on Internet message boards. The Commission was granted a temporary restraining order against the defendants' future violations of the antifraud provisions of the federal securities laws and a freeze on their assets. The defendants' dissemination of misinformation on the Internet drove the stock of Dallas, Texas-based NEI Webworld, Inc. (NEIP) from a closing price of $.13 per share on Friday, November 12 to a peak price of over $15 per share on Monday, November 15.
In related actions, defendants Aziz-Golshani and Melamed were arrested by agents from the Federal Bureau of Investigation's Los Angeles field office and charged with one count each of conspiracy to commit securities fraud.
The Commission's civil complaint and documents filed in support of emergency relief allege the following:
The Commission's action also seeks preliminary and permanent injunctive relief, disgorgement of illegal proceeds with prejudgment interest, and civil money penalties based upon the defendants' alleged violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The Commission is grateful for the able assistance of NASD Regulation, Inc. in this matter.http://www.sec.gov/litigation/litreleases/lr16391.htm