SYDNEY (05/03/2000) - Two Australians have been charged with using spam e-mail and Web billboard messages to unnaturally inflate share trading, the Australian Securities and Investments Commission (ASIC) has announced.
According to ASIC, the two men sent unsolicited e-mails to an estimated 4 million e-mail addresses worldwide, claiming shares in a Nasdaq-listed technology company called Rentech would soon inflate 900 percent. The Internet billboard messages claimed the same.
The investment watchdog said in a statement that the e-mails and billboards issued by the two Australians advised investors that Rentech share prices were expected to balloon from US$0.33 to more than US$3.00 "in the next few months", immediately that company made public a series of pending patents.
Accordingly, Rentech stock prices doubled the next trading day, with its trading volume increasing to more than 10 times the previous month, ASIC said.
ASIC began its investigation in May 1999, after the U.S. Securities and Exchange Commission (SEC) gave ASIC information that led to the finding of the two culprits.
ASIC charged the men with 19 criminal offenses, including persuading traders to deal in shares by publishing a forecast they knew to be false and "carrying on" a securities business without a dealer's or investment license.
SEC has already commenced civil proceedings against the two Australians in the U.S.