UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16705 / September 15, 2000
SECURITIES AND EXCHANGE COMMISSION v. STEPHEN HOURMOUZIS AND WAYNE LOUGHNAN, No. 00-N-905 (D. Colo.)
The Commission announced today that it obtained a default judgment against two defendants who perpetrated an Internet spam operation that falsely touted the stock of Rentech, Inc. in early May 1999. As alleged in the complaint, Stephen Hourmouzis and Wayne Loughnan sent between six and seven million spam e-mails and posted several messages on Internet bulletin boards that contained numerous false statements touting Rentech. The messages, which were masked and made to appear as though written by analysts, caused the price of Rentech's stock to double and trading volume to increase by 1,600 percent before Nasdaq halted trading. The Commission alleged that Hourmouzis and Loughnan thereafter sold their Rentech stock into the inflated market, realizing approximately $14,000 in profits. Rentech was not implicated in the spam operation.
In its final judgment, the United States District Court for the District of Colorado permanently enjoined Hourmouzis and Loughnan from violating the antifraud provisions of the federal securities laws [Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder]. The Court also ordered Hourmouzis and Loughnan jointly and severally to pay disgorgement of $14,256.25, prejudgment interest of $1,537.50, and postjudgment interest from the date of judgment until they have fully disgorged their ill-gotten profits.
The Commission's action is a result of international cooperation and coordination, and the Commission thanks the Australian Securities and Investment Commission.