The Securities and Exchange Commission alleged in a civil suit that Cole A. Bartiromo reaped at least $91,400 by posting false information about companies on the Internet to inflate their stock prices and then selling his blocks of shares at a profit.
Bartiromo carried out the "pump and dump" scheme by posting more than 6,000 messages on Yahoo and Raging Bull message boards about at least 15 companies between May and July of last year, the SEC said. He usually used aliases and falsely attributed the information in the messages to financial news services, according to the suit.
Bartiromo is not related to well-known anchor Maria Bartiromo of the CNBC financial television network, CNBC spokeswoman Amy Zelvin said Monday.
The SEC, which filed the suit in federal court in New York City, is seeking unspecified civil fines and repayment of allegedly ill-gotten gains from Bartiromo, his "Invest Better 2001" Web site and "Defendants John and Jane Does 1-10." The latter were described as unknown individuals or groups of people who along with Bartiromo were responsible for the alleged misconduct.
The SEC also is asking a judge to freeze assets of Bartiromo and "Invest Better 2001" and to order all the defendants to return assets held overseas to this country. The agency also is seeking orders enjoining them from future violations of securities laws. Bartiromo, 17, is a high-school student living with his parents in Mission Viejo, Calif.
His lawyer, David Bayless, didn't immediately return a telephone call seeking comment on the SEC's new suit.
In a settlement with the SEC in January, Bartiromo agreed to repay the $900,000 of his allegedly ill-gotten profits from the sports betting scheme that agency investigators had located in an account at a Costa Rico casino. He neither admitted to nor denied the SEC's allegations in the settlement.
The SEC had alleged that from Nov. 1 through Dec. 15, 2001, Bartiromo raised more than $1 million by selling what he described as "guaranteed" and "risk-free" investments in which he pooled investors' money to bet on sporting events. The scheme promised returns of 125 percent to 2,500 percent, according to the SEC.
The SEC first sued in the case on Dec. 13 without naming Bartiromo, whose identity the agency later discovered. It was the latest case pursued against a youngster by the SEC for allegedly masterminding a securities fraud using the Internet.
In a prominent case in September 2000, the SEC brought its first charges against a minor when it sued Jonathan Lebed, who earned more than a quarter-million dollars trading stocks on the Internet in less than six months -- though he was only a sophomore in high school in New Jersey.
Lebed agreed to repay $285,000, which the SEC said represented illegal profits and interest. He neither admitted nor denied the allegations, but agreed to refrain from similar behavior.
Last August, 23-year-old Californian Mark Jakob was sentenced to nearly four years in prison for issuing a phony press release to manipulate the price of stock in the high-tech firm Emulex Corp. The SEC had said that Jakob's actions defrauded investors out of $110 million.
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