[Sydney, AUSTRALIA] A man has been sentenced to two years’ imprisonment after pleading guilty to charges of posting misleading investment information to discussion boards and mass “spam” emails.
Steven Hourmouzis of Donvale, Victoria was charged by the Australian Securities and Investments Commission (ASIC) relating to e-mails and postings transmitted in May 1999 regarding a U.S. company named Rentech Inc. Rentech was at the time listed on Nasdaq, with stock selling for US $0.33. After Hourmouzis’ e-mails claiming the stock would rise to US $3 or more and postings on Web boards operated by Yahoo! and Raging Bull, the price of Rentech stock doubled on a trading volume that was more than 10 times the previous months average trading volume.
ASIC alleged that more than four million of the spam e-mail messages were sent to addressees in the United States, Australia and other parts of the world.
Hourmouzis had purchased 65,000 shares in Rentech through a stock broking firm in Canada several days before he transmitted the spam e-mails and arranged for
the posting of the Web board messages. He sold his shares on the first trading day after the transmissions, making a profit of US $17,000.
The United States Securities and Exchange Commission has instituted its own
proceedings against the man and has obtained judgement against Hourmouzis that he and his co-accused “disgorge their ill-gotten profits” to the tune of US $15,000.
The official charges levelled at Hourmouzis were interference with, interruption of or obstruction of the lawful use of file server computers operated by SAAB Automobile Australia, Australian Business Access, Apache Global IT, Brisbane Internet Group, Viper Productions, OE & DR Pope,
Tour Hosts, Department of Health and Human Services of Tasmania, The Lost
Dogs’ Home and Mondial Net by means of a telephone facility operated by Telstra; and “making a statement or disseminating information that was false or misleading and likely to induce the purchase of securities of Rentech by way of transmission of electronic mail messages containing information relating to Rentech when he knew or ought to have known that the information was misleading.”
The Court ordered that Hourmouzis be released after serving three months of the term of imprisonment upon his entering into a $500 two-year good year behavior bond.
