SEC charges 2 men in alleged stock scam |
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Published
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Mon, 09 Jul 2007 23:24
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DALLAS (AP) - Federal regulators filed civil fraud charges Monday against two Houston-area men, accusing them of hijacking personal computers to send out spam e-mails and bilk investors out of $4.6 million.Separately, state and local authorities announced indictments charging Darrel T. Uselton and his uncle, Jack E. Uselton, with engaging in organized criminal activity and money laundering. Authorities said they seized more than $4.2 million from bank accounts associated with the men.The Securities and Exchange Commission filed a lawsuit against the Useltons in U.S. District Court in Houston. The SEC said the men used 'botnets' or networks of PCs that are taken over remotely to spread spam over the Internet.The SEC said the men bought shares in at least 13 penny stock companies and sold the 'near-worthless' stocks after hyping them in spam e-mails and direct-mail campaigns from May 2005 to December 2006.The SEC said it was tipped off when a commission attorney got one of the spam e-mails at work.A lawyer for the Useltons did not immediately return a call for comment.The SEC said it is seeking recovery of ill-gotten gains and civil penalties and a ban on the Useltons dealing in penny stocks.The SEC said it barred Jack Uselton, 69, of Houston, from violating anti-fraud provisions in a 2002 settlement of a case involving a 'pump and dump' stock-fraud scheme. It said Darrel Uselton, 40, of Katy, had been disciplined by the National Association of Securities Dealers in 2004 and 2005.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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