Thursday, August 09, 2007
Daily Kos blogger Jerome Armstrong fined by SEC for not disclosing interest
August 8, 2007, 2:15 pm
Blogger to Pay $30,000 in S.E.C. Case
By Chris Suellentrop
Tags: Jerome Armstrong, s.e.c.
Prominent liberal blogger Jerome Armstrong has agreed to pay nearly $30,000 in fines in a settlement with the Securities and Exchange Commission over allegations that Armstrong touted the stock of a software company on Raging Bull, an Internet bulletin board, in 2000, without disclosing that he was being paid to do so.Armstrong, the co-author of .Crashing the Gate: Netroots, Grassroots, and the Rise of People-Powered Politics,. with Markos Moulitsas of Daily Kos, and the founder of the Democratic activist site MyDD.com, consented to a civil penalty of $20,000, plus disgorgement of $5,832, and $3,235 in interest.
The settlement resolves the S.E.C..s claims against Armstrong, said Robert Burson of the S.E.C..s Chicago office.Under the agreement, Armstrong neither denies nor admits to the allegations..It.s good to see the matter finally end,. Armstrong said in an e-mail message to The Opinionator today.
U.S. Securities & Exchange Commission
SEC Seal Home | Previous Page
U.S. Securities and Exchange Commission
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20228 / August 7, 2007
SEC v. Sierra Brokerage Services, Inc., et al., United States District Court for the Southern District of Ohio. Civil Action
On July 26, 2007, the Honorable John D. Holschuh, U. S. District Judge for the Southern District of Ohio, entered a Final Judgment as to defendant Jerome B. Armstrong ("Armstrong"). The Final Judgment permanently enjoins Armstrong from future violations of Section 17(b) of the Securities of 1933. The Final Judgment further orders Armstrong to pay disgorgement in the amount of $5,832, prejudgment interest of $3,235, and a civil penalty of $20,000. Armstrong consented to the entry of the Final Judgment without admitting or denying the allegations of the Commission's Complaint, except as to jurisdiction.
The Commission's Complaint, filed on April 14, 2003, alleged that beginning on March 6, 2000, Armstrong touted the stock of BluePoint Linux Software Corporation ("BluePoint") by posting unsubstantiated, favorable buy recommendations on the Raging Bull internet site. Armstrong posted over eighty such recommendations during the first three weeks that the stock of BluePoint was publicly traded. According to the Complaint, Armstrong praised BluePoint's investment value and encouraged investors who were experiencing trouble having their orders filled to keep trying. The Complaint further alleged that the promoters of BluePoint were secretly transferring stock in three other companies to Armstrong at prices below the then current market for those three stocks and that Armstrong made at least $20,000 by selling the shares he received from the promoters of BluePoint. The Complaint alleges that Armstrong did not disclose in his internet postings that he was being compensated for !
making the postings.