From Somewhere In Cyberspace

I am writing this from a “safe house.”

No, I am writing this on my laptop from a terminal at a major East Coast
airport.

Check that. I am dictating this from a pay phone to a “friend” who is
typing on a computer in a Palo Alto cyber cafe. (Hey, what’s that clicking sound?)

I apologize for the misdirection and subterfuge, but with the Securities and Exchange Commission (SEC) stepping up its investigation of Web sites
that host “chat rooms” for day traders, I fear the feds are closing in.

The latest focus of the SEC probe, according to The Wall Street Journal,
is Day Traders On-line, one of many sites where stock shills and ticker
junkies mingle and talk stocks. SEC officials are looking into whether some publicly traded companies are paying sites like Day Traders On-Line
to issue recommendations for their stocks to day traders in “real time” chat rooms.

The federal government is concerned that these sites are manipulating some stock prices at the expense of less knowledgeable investors, an
activity which historically has been the exclusive right of
underwriters, financial analysts and other Wall Street insiders.

While I’m all for the government trying to protect uninformed investors
(where was it when I bought into Silicon Graphics?), my concern is the
SEC will broaden its efforts to oversee the discussion of stocks on the
Internet. After all, the Internet Stocks Channel has a forum where
readers can weigh in and debate issues related to Internet shares.

Paranoia, you say? Look at the Starr Investigation. One minute they’re dredging up bank records from 15-year-old Arkansas land deals, the next
they’re questioning some kid about stained dresses and cigars. Even the
Clinton-haters have to admit Starr strayed well beyond his original
mandate as Whitewater special prosecutor.

Maybe the SEC will stay on target and focus exclusively on those sites that aggressively issue “buy” and “sell” recommendations to eager day
traders looking for a quick kill. I hope so. I’d hate to think my
long-standing advice to “buy low, sell high” will trigger a deposition.

Remember, you didn’t hear that from me.

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