Texas Man Accused of Using Spam in Stock Scheme

Share this article:
The Securities and Exchange Commission has filed a lawsuit against Mark Rice, a Texas man accused of stock manipulation and the unlawful use of e-mail while operating a company called Primex Capital, the agency said.


The SEC alleges that from September 1999 to July 2000, Rice used spam to carry out a "pump and dump" scheme to manipulate the stock of four small companies.


Rice made more than $900,000 in profit, the SEC said. He consented to abide by an order that prohibits him from future violations of SEC rules and that he will repay the more than $900,000 plus interest, the commission said. The court will determine the exact amount.


According to the SEC, a pump and dump stock manipulation scheme on the Internet involves a company's Web site, which may prominently feature "a glowing press release about its financial health or some new product or innovation. Newsletters that purport to offer unbiased recommendations may suddenly tout the company as the latest 'hot' stock." This good press may prompt investors to buy the stock "in droves, creating high demand and pumping up the price." The stock is then sold at a large profit.


The SEC accused Rice of using this technique to pump up the stocks of four tiny, legitimate companies: Rockport Healthcare Group; Global Connections; Pinnacle Business Management and Portalzone.com. The companies are traded either on the Over the Counter Bulletin Board or the National Quotation Bureau's Pink Sheets.


The commission alleges that Rice sent e-mails about the four companies that contained incorrect information. It further alleges that in the case of Portalzone.com, he made false statements about the company's search engine technology and lied about its revenue sources and business relationships. He also is accused of engaging in "manipulative trading" and issuing "false press releases or promotional materials."


None of the companies Rice is accused of touting has been accused of any wrongdoing by the SEC. Rice could not be reached for comment.


Share this article:
You must be a registered member of Direct Marketing News to post a comment.

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

Customer Centricity Is Spurring Marketing-Tech Investments

Customer Centricity Is Spurring Marketing-Tech Investments

A majority of marketers rank customer satisfaction improvements as paramount in the technology investment decisions.

Big, Bold Moves in the C-Suite

Big, Bold Moves in the C-Suite ...

JCPenney appoints Home Depot's Marvin Ellison as CEO; Harte Hanks and JWT add hitting power to their C-level benches

Campaign Comes to the States

Campaign Comes to the States

DMN's UK-based sister publication launches Campaign US