Web stock tipster charged
A US citizen who runs a Web site that recommended stock market investments has been accused of violating US securities fraud laws.
The Securities and Exchange Commission announced on Tuesday that it had filed civil securities fraud charges against Nicholas A. Czuczko, 34, of Beverly Hills, California.
In the complaint, Czuczko is accused of using his Web site, www.thestockster.com, to commit securities fraud. The SEC claims that Czuczko would buy stocks before promoting them on The Stockster site, and then sell his stake once the stock price had risen.
"Czuczko's practice was to buy shares of the recommended stocks shortly before posting the selection on the Stockster website. When unsuspecting Internet visitors bought the recommended stocks and drove up the price of the shares, Czuczko sold or 'scalped' his holdings for substantial profits, without disclosing his own sales on the Stockster site," claimed the SEC.
Czuczko could not be contacted for comment.
A statement on The Stockster explains that "TheStockster.com's employees, affiliates, and/or family members or friends of the aforementioned own positions in all of the featured companies which were acquired prior to the publication of this announcement, and will buy and/or sell the stock of said companies at any time without further notification.
"You should be aware that the aforementioned have a present intent and will buy or sell before, during, and/or after (or any other possible combination) any and all companies that are mentioned on TheStockster.com," the statement continues.
According to reports, Czuczko spent more than $1m (£535,000) advertising his site online.
Studies have shown that stock tips posted online, or sent over email, can have a significant effect on the stock market.