12.20.07
SEC vs. The Stockster
The SEC just won a judgment against Nicholas A. Czuczko of www.thestockster.com. According to the SEC, Czuczko “promoted thinly-traded penny stocks on his Stockster website while he personally planned to sell his shares of the stocks into the rising price spurred by the recommendation.”
Czuczko was forced to disgorge $1.5 million in profits and $120,000 in interest and he was forced to pay a punitive fine of $100,000. While the judgment is to be lauded, the punitive fine is too small. I believe that he should have received a punitive fine that was at least equal to the damages he caused.
While I have little sympathy for Czuczko’s victims due to their greed and idiocy (why would they trust some random guy with a website?), pump and dump scams will continue to proliferate until the SEC gets serious about increasing the punishment to those who mislead investors for their own profit.
Goode Value Investing & Trading Blog » An open letter to Nicholas Czuczko said,
January 20, 2010 at 2:36 pm
[...] when I received an email from Nicholas Czuczko asking me to take down this past blog post about his loss in court to the SEC, my inclination was to not comply. Simply put, my reporting of [...]