SEC Settles Administrative Proceeding Alleging Online Touting
On October 13, the U.S. Securities and Exchange Commission accepted offers of settlement submitted by Scott P. Flynn and Strategic Network Development, Inc. to resolve an administrative proceeding that the Commission commenced on February 24, 1999. Flynn and Strategic reportedly consented to entry of an Order Making Findings and Imposing Remedial Sanctions and a Cease and Desist Order without admitting or denying the Commission’s allegations. The order finds that “Flynn and Strategic violated the anti-touting provision of the Securities Act by publishing profiles of ten different publicly-traded companies on Stockprofiles.com, an Internet website, and by e-mail, in exchange for over $180,000 in cash and a total of 322,500 shares of stock from issuers profiled on the website without properly disclosing their receipt of the compensation.” The order additionally finds that Flynn used Strategic Network to spam “low price stock alerts” to 500,000 people using unsolicited commercial e-mail. The order requires both to cease and desist from committing or causing the commission of any future violation of Section 17(b) of the Securities Act of 1933. Flynn also is “barred from association with any broker or dealer and from participating in any offering of penny stock, based upon an unrelated criminal conviction for federal securities fraud.” See SEC News Digest No. 99-198 (Oct. 14, 1999) <http://www.sec.gov/news/digests/10-14.txt> (scroll down to “Findings Made, Remedial Sanctions Imposed and Cease and Desist Order Issued in Administrative Proceedings Against Flynn and Strategic”).
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