SEC Charges Eleven in Stock Manipulation Ring

[Mr Wizard a1a]

Things to consider. Matt is a goner. Reading the indictment makes it clear jail time is very likely. Each thing charged by the US Attorney carry 5-20 year sentences as well as fines. The case looks strong with messages quoted making the case with money movements to prove it.

Matt says, “ADVFN is aware of the situation and they consider it a personal matter.”

Letting someone the US Attorney says is a criminal run your business is a bad plan. It is very clear from messages on the board that Matt still runs the show, makes the big decisions, and is the final word. I think IHub itself is vulnerable under 10b-5 and Matt presents a risk and path if the US Attorney or SEC would want to expand Matt’s case into the message board he created.

§ 240.10b-5 Employment of manipulative and deceptive devices. It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security. http://wiffenproof.angelfire.com/mattindictment.pdf

Paraphrasing IHub, IHub says it only supplies the gun, not the bullets or trigger pulling. I read the law that gun supplying is enough for an unlawful act here. This is especially true when simple changes to IHub practice (which have been suggested over and over) would help cure the unlawful acts. And yet, ADVFN chooses to let Matt run the show. Could be a problem if DOJ or SEC decides to expand the case into IHub Matt runs.

IHub wants to be seen like the Phone Company in these matters. TPC supplies the means, but is not responsible for what is done with those means. The difference here is that the Phone Company does NOT engage in any decision making or enforcement of the rules of usage – IHub does daily and so does Matt. IHub takes an active role and is culpable for the results and acts. IMO

Comments?