DAYTRADING YAHOO!

[NovoMira]

Yahoo Execs Accused of Fraud: Will Semel Take the Fifth Today?

Tuesday June 12, 9:18 am ET

John Olagues submits: Yesterday I received an important legal document from a law firm called Lerach, Couglin, Stoia, Geller, Rudman & Robbins LLP. It is a notice of a lawsuit filed against Yahoo!, Semel et al and that I am a member of the class of people who were allegedly damaged by the actions of the accused.

Looking more closely, I see that this law firm is claiming that the accused were 1) Generating fraudulent revenue; 2) Making false, misleading and deceptive representations and were influencing people to buy the stock 3) And that Yahoo's advertising technology was operationally defective.

Law firms are not supposed to file lawsuits in Federal Court unless the lawyers have researched the law and the facts before filing the claim. So if the allegations are true, the alleged actions of Semel, Decker et al may cause them to worry about criminal prosecutions under the Securities and Exchange Act of 1934, the Sarbanes-Oxley bill and state fraud statutes.

Now why would Semel want to put out exaggerated earnings moving the stock higher? Why would he want the stock higher?

He wanted to sell. Did he sell after the great earnings announcement and the announcement of a stock split? Of course he did. He sold 2,000,000 shares at $55.25 the first day that he was allowed to sell stock after the earnings announcement.

He sold on Monday April 12, 2004 after being granted 2.9 million options to buy the stock at $41.70 (5 cents above the low closing price of the year 2004). The grant day was March 10, 2004.

He sold another 5,200,000 million shares during the period April 8, 2004-July 18, 2006.

If the allegations have merit, some attorneys would advise Semel to assert his Right under the Fifth Amendment to not incriminate himself. Will Semel respond to hard question or will he refuse to answer? We will find out today.