SEC Sues Day Trader To Stop What It Calls a “Ponzi Scheme”
On October 15, the U.S. Securities and Exchange Commission filed suit and obtained a temporary restraining order and asset freeze against Mark Drucker of Atlanta, Georgia. The SEC alleges that Drucker raised $6.2 million from 80 investors by representing that he is a successful day trader and could get them returns of 50% or more [...]
Australian E-Brokers Reportedly Suffer Spate of Trading Outages
On October 14, Australia’s AFR Net Services reported that repeated outages at Australian e-brokers are beginning to “try the patience of professional traders”. According to the report, the previous week customers of Sanford Securities Ltd. online brokerage service “received repeated e-mails from the company, pleading for patience as if beefed up its computing power.” Likewise, [...]
Federal Securities Statute Preempts State Claims vs. E-Broker
On October 13, BNA, Inc.’s Electronic Commerce & Law Report issued a report on a fascinating decision by the United States District Court for the Southern District of California. The case involved is Aaron Abada, on behalf of himself and all others similarly situated v. Charles Schwab & Co., Inc., a California Corporation, and Does [...]
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 [...]
Pittsburgh Finalizes Plans To Sell Municipal Bonds Via Internet
On October 11, the City of Pittsburgh announced that it has finalized plans to use MuniAuction Inc. of Pittsburgh to conduct an online auction of the city’s bonds via the Internet. The auction reportedly will take place in early November and will be open to Wall Street dealers and more than 750 institutional investors. There [...]
Consent Final Judgment Entered in Pyramid Case Involving Internet
On October 8, the U.S. Securities and Exchange Commission announced that the Honorable Richard W. Story of the United States District Court for the Northern District of Georgia has entered a Consent Final Judgment of Permanent Injunction against International Heritage, Inc. (IHI), International Heritage Incorporated (IHI Incorporated) and Stanley H. Van Etten. In its complaint, [...]
Ohio Says Some Day Traders May Be “Dealers” Under State Law
As reported in BNA’s Securities Regulation & Law Report on October 8, a member of the staff of the Ohio Securities Division has concluded that day traders “who buy and sell securities for another person’s account in the reasonable expectation of compensation from profit on the trades, may be securities dealers” under section 1707.01(E) of [...]
Levitt Speaks on Corporate Governance and Technology
On October 7, the Chairman of the U.S. Securities and Exchange Commission, Arthur Levitt, spoke before the American Council on Germany. His remarks focused on the need for strengthened and more modern principles of corporate governance due to technological changes that are moving society increasingly toward global markets. The Chairman stated “Information is the lifeblood [...]
ASIC Gains Injunction Against Offering Securities Via Internet
On October 7, the Australian Securities and Investments Commission announced that it has obtained final Supreme Court injunctions against Netlink Hospitality Australia Pty Limited, Netlink Australia Pty Limited and Mirko Detlev Petrick. The injunctions prohibit the defendants from, among other things, offering securities over the Internet for their venture involving the manufacture and installation of [...]
SEC Approves NYSE Plan To Lower Fees for Real-Time Quotes
On October 5, the U.S. Securities and Exchange Commission approved a plan by the New York Stock Exchange to lower the fees that it charges brokers for real-time stock quotes. Interestingly, discount broker Charles Schwab provided comments on the proposal stating that the overall fee structure “is not fair and reasonable because the fees charged [...]