U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18090 / April 14, 2003
S.E.C. v. Agora, Inc., Pirate Investor, LLC and Frank Porter Stansberry; Docket No. MJG 03 1042 (U.S.D.C., D.Md.)
The Securities and Exchange Commission filed a complaint in the United States District Court for the District of Maryland, on April 10, 2003, seeking a permanent injunction against Agora, Inc., Pirate Investor, LLC and Frank Porter Stansberry. The complaint alleges that Agora, Pirate and Stansberry violated the antifraud provisions of the federal securities laws. The complaint also seeks disgorgement and civil money penalties from all three defendants.
The complaint alleges that beginning May 14, 2002, Agora, Pirate and Stansberry disseminated unsolicited e-mails to subscribers of more than 15 Internet newsletters published by Agora. It is alleged that the e-mails, which were authored by Stansberry, offered to sell inside information concerning government approval, to be announced on May 22, 2002, of a contract which would yield billions in dollars in revenues for an unnamed company listed on the New York Stock Exchange and would enable investors to double their money on the announcement. It is further alleged that the unsolicited e-mails stated the inside information had been obtained from a senior executive of the company and offered to sell a report, which named the company, for a payment of $1000. The complaint alleges that approximately 1000 subscribers purchased copies of the report yielding revenues of approximately $1,000,000 for Agora. Finally, the complaint alleges that the so-called inside information was false in that even the company did not know when government approval of the contract would be received and that such approval was ultimately not received on May 22 as promised in the unsolicited e-mails and the report.
It is alleged that by engaging in such conduct Agora, Pirate and Stansberry violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.