From: mea culpa (jerichoDIMENSIONAL.COM)
Date: Tue Aug 31 1999 - 17:01:19 CDT

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From: "Prosser, Mike" <mike.prosserL-3Security.com>

[So, I guess Securities Fraud isn't all that serious? I can't believe the
 judge says part of the blame is that there is no protection against
 posting false messages on the net!!!!! Jeeze, no more than there is
 against false advertising in the printed media, radio, tv, etc. Think it
 is a thing called "Buyer Beware". -mike]

Web hoax creator sentenced to home detention, probation, restitution
http://www.nandotimes.com/ourcentury/front
By MICHAEL WHITE

LOS ANGELES (August 30, 1999 6:57 p.m. EDT http://www.nandotimes.com) - A
former employee who drove up the price of PairGain Technologies Inc. stock
by posting a fake news story on the Internet avoided a jail term Monday
when he was sentenced to five months of home detention and five years of
probation.

Gary Dale Hoke, 26, of Raleigh, N.C., also was ordered to pay $93,000 to
investors who purchased PairGain stock and sold at a loss after the
company denied the bogus report that it was about to be purchased by an
Israeli company for $1.35 billion.

Hoke, who did not profit from the hoax, pleaded guilty to two counts of
securities fraud. He was originally charged with five counts and faced a
maximum sentence of 10 years in prison and up to $1 million in fines per
count.

U.S. District Judge Terry Hatter rejected prosecutors' recommendations for
a prison sentence, saying that the scam could be blamed in part to the
lack of Internet safeguards to prevent posting of false messages.

In a separate settlement with the Securities and Exchange Commission, Hoke
admitted disseminating fraudulent information about Tustin, Calif.-based
PairGain and agreed to comply with federal antifraud regulations in the
future.

The April 7 hoax pushed up PairGain stock more than 30 percent, from 8 1/2
to as high as 11 1/4. Trading on the stock that day amounted to 13.7
million shares, about seven times its average trading volume. The price of
PairGain stock fell back to 9 3/8 when the company issued a statement
denying such a deal was in the works.

[snip..]

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