Computer Crime Research Center


Two Texas men settle charges in spam scam case

Date: March 19, 2009

The Securities and Exchange Commission yesterday said two men settled charges that they conducted a massive e-mail spam campaign to drive up the demand for penny stocks they owned.

he enforcement action arose from a spam e-mail received by an SEC staff attorney in August 2005 that had the subject line: “Experts are jumping all over this stock,” according to the SEC. Several more e-mails to the SEC followed.

The e-mails were sent by two Texas men, Darrel T. Uselton and his uncle Jack E. Uselton, who generated more than $4 million through the scheme, which involved buying and selling shares in 13 penny stock companies.

The SEC’s complaint said the men would “sell those shares into an artificially active, and oftentimes rising, market that they created through manipulative trading, spam e-mails, direct mailers and internet-based promotional activities.”

The e-mail campaigns lasted 20 months, the SEC said.

The charges were brought against the men in July 2007.
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