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Full-Text Articles in Law
Cybergossip Or Securities Fraud? Some First Amendment Guidance In Drawing The Line., Lyrissa Lidsky, Michael Pike
Cybergossip Or Securities Fraud? Some First Amendment Guidance In Drawing The Line., Lyrissa Lidsky, Michael Pike
Faculty Publications
Fifteen-year-old Jonathan Lebed, the youngest person ever pursued by the SEC in an enforcement action, made over $800,000 in six months by promoting stocks on Internet message boards. Using several fictitious screen names, Jonathan posted hundreds of messages on Yahoo! Finance, hyping selected over-the-counter stocks and then promptly selling his pre-purchased shares as soon as the stock prices rose.
Publicly, the SEC painted a picture-perfect case of securities fraud. Yet, the SEC forced disgorgement of only $285,000 of Jonathan's profits, leaving many observers to wonder why the resolution of this supposedly clear-cut case left its teenaged perpetrator with over $500,000. …