U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release. No. 17053 / June 26, 2001
SECURITIES AND EXCHANGE COMMISSION V. JARED RAY LEISEK AND BYRON JOHN LEISEK, Civil Action No. CV 01-6084 (AA) (D. Or.)
The Securities and Exchange Commission ("Commission") announced that on May 25, 2001, the U.S. District Court in Eugene, Oregon entered judgments against Jared R. Leisek and his brother, Byron J. Leisek. In its complaint, filed on March 1, 2001, the Commission alleged that the defendants operated a "momentum" stock picking website called TnTStock.com ("TnT"), through which the brothers issued stock recommendations on the website and via e-mail newsletter to more than 13,000 TnT subscribers. After the recommendations were released, the price and trading volume of the profiled stocks rose dramatically, often more than doubling the pre-recommendation levels. The complaint alleged that the defendants posted false information on a Yahoo! Club message board frequented by TnT's subscribers. The complaint further alleged that the defendants falsely claimed, among other things, that TnT's representatives held no more than 5,000 shares of any stocks profiled on the website and that TnT's representatives would never sell shares until thirty minutes after issuing a recommendation. In fact, the complaint alleged the defendants usually held more than 20,000 shares and sold most of their shares within thirty minutes of the release of the recommendations. The defendants are alleged to have made $195,994.50 in profits from the scheme.
Without admitting or denying the allegations contained in the complaint, the defendants consented to the entry of judgments permanently enjoining them from future violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and ordering them to pay disgorgement totaling $195,994.50 and prejudgment interest thereon, but waiving payment of disgorgement and not assessing civil penalties based upon the defendants' demonstrated inability to pay.
For additional information, see Litigation Release number 16921 (March 1, 2001).
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.