Securities and Exchange Commission
Litigation Release No. 17639 / July 30, 2002
SECURITIES AND EXCHANGE COMMISSION v. SCOTT S. FRASER AND SPARKLIST.COM, Civil Action No. 02-05485 GAF (PLAx) (C.D. Cal.)
On July 29, 2002, United States District Judge Gary A. Feess ruled that Scott S. Fraser and SparkLIST.com must comply with investigative subpoenas issued by the Securities and Exchange Commission. Fraser, of San Diego, California, publishes a monthly investment newsletter called The Natural Contrarian and operates an internet website called ScottFraser.com. Sparklist, based in Green Bay, Wisconsin, is an internet related company that sends e-mails messages for businesses who wish to outsource their email newsletter. Sparklist was paid by Fraser to send e-mails to the public about Fraser's and his subscribers' investment success.
On May 13, 2001 and May 21, 2001, the Commission issued subpoenas to Fraser and Sparklist seeking documents relating to Fraser's possible violations of the antifraud and investment adviser registration provisions of the federal securities laws. After Fraser and Sparklist failed to comply with the subpoenas and did not provide any valid justification for their failure to comply, the Commission filed an application in federal court in Los Angeles seeking an order directing Fraser and Sparklist to comply with the subpoenas.
The Commission's application alleged that Fraser recommends the purchase and sale of securities in The Natural Contrarian and through ScottFraser.com. The Commission is investigating whether Fraser has falsely claimed that he has "turned over 1,170 of [his] subscribers into MULTI-MILLIONAIRES," that his "oil and gas [stock] picks have yielded over 1,805% combined returns," and that "over 87% . . . [of his] stock recommendations . . . have increased on average 135% in the past 28 months."