SoftNet Technology Corp (fka SOFN)

[Pamplonan]

What do you think of this?
this just in...regarding SEC Investigation

News for 'STTC' - (Softnet Technology Denies $15K Promotion Fits SEC Profile For Trading Halt)

(financialwire.net via COMTEX) -- March 1, 2005 (FinancialWire) James
Farinella, CEO of Softnet Technology (OTCBB: STTC), contacted FinancialWire
Monday to strongly deny that a junk fax promotion hyping its stock makes the
company a potential candidate for a Securities and Exchange Commission
regulatory trading halt, and to threaten a "class action" lawsuit
involving from 50 to 100 other companies.

FinancialWire was subsequently able to independently determine that the junk fax
was part of a $15,000 campaign "package" furnished to an unnamed
"third party" on behalf of Softnet by FinancialNewsUSA (OTC: FNWU),
which appears also to provide either news or promotional services for Global
Environmental Energy (OTCBB: GEECF), which itself recently was the subject of a
massive email spam campaign, and U.S. BioDefense (OTCBB: UBDE).

FinancialNewsUSA spokesperson Eddie Cruz told FinancialWire that an unnamed
"third party" paid his company $15,000 for 250,000 faxes, 150,000 emails
and industry news coverage.

Farinella called FinancialWire twice. The first was to ask if "you a - - h -
- - s know that your article is tanking my stock?" and to threaten a
"class action" lawsuit. "You have p - - - - d me off, and you'll
find out what that means. I'll be calling 50 to 100 companies and we'll all
bring a class action lawsuit against you."

He stated he had received over 20 calls, and that "investors in Germany"
were particularly confused about whether there is an SEC investigation into
Softnet Technology. The SEC does not reveal whether it is conducting an
investigation.

Farinella's second call came after FinancialWire emailed him and left a message
asking about the promotion, who are the third parties, and if those third
parties are or planned to sell stock into the hype.

The junk fax stated that "this publication and its affiliates may have up to
a 4.9% equity position in the companies mentioned herein." The fax did not
disclose that its publishers had received a $15,000 fee, which appears to be a
violation by FinancialNewsUSA of U.S. Securities and Exchange Commission
Regulation 17(b).

When questioned about the program, Farinella acknowledged that he knew the
promotion was occurring, confirming that it was for cash and not for stock, and
asked "what's wrong with companies doing awareness?"

He was asked if "doing awareness" included violations of SEC Regulation
17(b), and Farinella said he was not aware that any violations had occurred.

The U.S. Securities and Exchange Commission Regulation 17(b) states:

"It shall be unlawful for any person, by the use of any means or instruments
of transportation or communication in interstate commerce or by the use of the
mails, to publish, give publicity to, or circulate any notice, circular,
advertisement, newspaper, article, letter, investment service, or communication
which, though not purporting to offer a security for sale, describes such
security for a consideration received or to be received, directly or indirectly,
from an issuer, underwriter, or dealer, without fully disclosing the receipt,
whether past or prospective, of such consideration and the amount thereof."

"The SEC has told FinancialWire that Regulation 17(b) means full and
complete compensation for research and any other services provided, including
amounts and sources, must be disclosed in 'every press release' as well as other
published documents. The SEC states that third party compensations must include
the relationship of the payer to the issuer.

"In an email to FinancialWire, John J. Nester, a spokesperson for the U.S.
Securities and Exchange Commission, confirmed that regulators interpret 17(b) to
mean that specific compensation information must be contained in press releases,
and that a link to a disclosure somewhere else, for example, is a violation of
the regulation. He further stated that the compensation disclosure required by
the SEC includes 'amounts and sources in any press release mentioning the
company under research coverage'."

Press releases issued by FinancialNewsUSA on behalf of client companies do not
disclose that the company has received funds for its promotional programs, or
the amounts, for such companies.

It recently said that it was issuing press releases through Yahoo (NASDAQ:
YHOO), but Yahoo told FinancialWire that no such announcement was authorized.

Farinella told FinancialWire that its article was "an invitation for the SEC
to investigate. I recently went through an SEC investigation." He did not
elaborate.

FinancialWire told Farinella that the SEC trading halts ' or "cooling off
periods" to alert naive investors to the existence of a promotion ' do not
necessarily mean the companies are involved, as stated in the article he was
complaining about. Farinella, however, was conversant with the promotion.
Whether that means he or his company was "involved" is open to
interpretation.

When told that FinancialWire had statements from FinancialNewsUSA regarding his
promotional program, he stated, "do you have it in writing? You better have
it in writing. I have nothing further to say to you. You will hear from our
lawyers."

According to the Dow Jones (NYSE: DJ) Wall Street Journal, "the SEC's move
is part of the agency's broader attempt to get ahead of possible fraud before it
becomes widespread."

It further stated: "The agency is expected to suspend trading in several
other companies within the coming weeks and months, according to people familiar
with the matter.

"At issue is the potential for so-called pump-and-dump schemes, whereby
speculative investors, company insiders or others try to inflate demand for a
stock by trumpeting positive-sounding information about a company -- typically
via e-mail -- and then cash in their shares at the higher price. Often the
information is false and the stock quickly declines again," explained the
Journal.

The SEC said that each week, the SEC's internet enforcement division, headed by
John Reed Stark, gets thousands of complaints from investors "about spam
email plugging stocks and other investments."

"We want to head off possible damage to shareholders before it occurs," John
Reed Stark, chief of the SEC's office of Internet enforcement, was quoted as
saying.

Investigators want to determine whether the ultimate goal in many of these
instances is to "artificially stimulate demand for the stock and then dump
shares once the price increased." The SEC hastened to add that it is not
asserting that many of the companies themselves are involved in the schemes.
Often they are just bystanders, but sometimes it results from stock issued to
offshore and even "promotional" sites and email and fax originators to
create "visibility," and the promoters often violate their promises to
the companies to sit on the shares.

"Under certain circumstances, an improper stock distribution in violation of
SEC regulations can be a prelude to a manipulation," Peter Bresnan, an associate
director in the SEC's enforcement division, was quoted as saying.

Softnet Technology had been reported to FinancialWire by users of JunkFax
(http://www.junkfax.org), who then faxed the junk fax to FinancialWire.

On March 26, 2003, Benchmark coverage was initiated on T&G2, now Softnet
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