FBI Cracks Down on Day Trader/Internet Hoaxter
By Damon Marturion
New Business News Staff Writer
Los Angeles, CA -- What if you were a day trader and could use your PC to issue a press release that would dramatically effect the price of stock? If it were effective enough to drive stock prices down - timed correctly - one could easily sell before the release hit and buy as the stock tanked, then wait for recovery.
23-year-old Mark Simeon Jakob realized this dream come true. Having the technology at your fingertips makes the proposition quite tempting. After experiencing an unforeseen loss in his day-tradings, Jacob issued a false press release on the behalf of Emulex last August.
The press release indicated that the company would restate previously reported profits as losses, and that its CEO had quit. It also said that Emulex was facing a SEC investigation.
Using skills obtained while employed by Internet Wire Jakob was able to submit the release via normal electronic media channels. So convincing was the story that it was picked up by Wall Street Journal publisher Dow Jones and Bloomberg, resulting in a loss of stock value in the neighborhood of $2.5 billion.
Emulex acted quickly by issuing an official release discounting Jakob's false release, which caused the stock to return to normal. Meanwhile, Jakob netted a tidy $241,000 from the stock market irregularity.
The FBI was able to track Jakob's electronic trail of Internet protocol numbers leading to a computer at his former school, El Camino Community College in Torrance, California.
Now Jakob faces prison time, fines and an order to repay the victims of his electronic-day-trading-coup.
"We hope this will be a lesson to everyone who distributes the news,'' said Assistant U.S. Attorney Carl Moor. ''This is the first crime where someone really took advantage of the legitimate news media," he added, calling this a "spectacular case.''
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