Two Taxes Men Pleaded Guilty of Running Stock Campaign to Make Money

On March 18, 2009, the US Securities and Exchange Commission (SEC) disclosed that two men from Texas settled SEC charges that they launched a massive mail spam campaign.

Jack Uselton and his cousin Darrel Uselton were accused of using the botnet for sending spam. The Useltons inundated the inboxes across the US with spam. These spam promoted worthless penny stock using baseless price projections.

SEC informs that the inspection begins when the commission attorney received a spam mail during August 2005. The e-mail had the subject line - experts are advocating to buy this stock. Another spam informed that the e-mail sender had - uncovered a diamond here -
and asks users to buy the stock promoted in the e-mail for making money.

After investigating the case closely, SEC was able to recognize the culprit 'Useltons' as the major reason behind the mails. The SEC further disclosed that from May 2005 to December 2006, he produced proceeds of almost $4 Million through a scheme in which they can acquire inexpensive stock from around 13 penny stock firms.

While investigation is still going on, the evidences found in Useltons case have already lead to criminal accusations against four individuals from Colorado and Texas. In the mean time, after matching various spam mails with the Useltons, the SEC informs that every market manipulations are based on a common pattern.

Interestingly, when the SEC took up the case, Useltons accepted to be permanently prohibited from selling penny stock in the future. From $4.2 Million seized by officials, Darrell Uselton will pay around $2.8 Million in pre-judgment and disgorgement interest. The SEC will also collect a $1 Million penalty.

Chairman of SEC, Mary Schapiro, says that spam mail comes in various forms. She also adds that if a mail campaign corrupts the securities market and defrauds investors, SEC will pursue it, as reported by LawFuel on March 18, 2009.

Further, penny stock spam mails was one of the spamming methods founded by hackers during 2005-2007. This leads to a chaotic situation as many users dealing in share markets lost their money.

Related article: THE SPAM MAFIA

» SPAMfighter News - 3/24/2009