U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16684/ September 6, 2000
SECURITIES AND EXCHANGE COMMISSION v. CHRISTOPHER P. HASTINGS D/B/A/ STOCKPICKS1, Civ. No. 00-2397-GTV (USDC D. Kansas)
The Securities and Exchange Commission announced today that it filed a federal court action against Kansas resident Christopher P. Hastings ("Hastings"), a school bus mechanic with no experience in the securities industry. The Commission's complaint alleges that between September 1999 and early January 2000, Hastings, using the name "Stockpicks1," touted the stock of ten issuers through a free e-mail newsletter, on an Internet website he maintained, and in messages he posted on various Internet message boards. According to the complaint, Hastings, who coordinated his stock recommendations with other touters against whom the Commission obtained a preliminary injunction in April 2000, included data on his website indicating that a growing number of his past stock picks (eventually reaching six) had achieved high prices significantly exceeding the pre-tout prices listed, representing an average increase of 410%. The complaint alleges that this information was false and misleading because it did not disclose that: (1) the pre-tout and post tout prices represented intraday lows and highs measured during arbitrarily varying periods; (2) on average, the listed stocks declined to below their pre-tout prices within two weeks; and (3) the prices of four additional stocks not listed on the website experienced both short-term and long-term price declines. Further, according to the complaint Hastings also misrepresented his trading intentions in Internet message board postings and e-mail messages. Moreover, the complaint alleges that in two instances, Hastings sold his personal holdings of the touted stocks into the resulting inflated market for total profits of approximately $70,309. This action is part of the fourth nationwide Internet fraud sweep conducted by the Commission since October 1998.
The Commission's complaint alleges that Hastings violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks disgorgement and a permanent injunction. Without admitting or denying the Commission's allegations, Hastings has consented to the entry of an order that would enjoin him from future violations of the foregoing provisions and disgorge $70,309 plus prejudgment interest, but would waive payment of disgorgement of all but $22,312 and would not impose a civil penalty based on his demonstrated inability to pay.
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.