In a follow-up to a story from Net news last month, the SEC has filed a suit against Charles Huttoe, CEO of Systems of Excellence, claiming that he "carried out a massive and on-going manipulation" scam over the Internet.
Huttoe, who is now in custody, used the Internet to manipulate his companies shares by sending out bogus press releases, false contracts and information on unregistered shares. It is the first time the Internet has been used to "manipulate the price of a public security" according to an SEC spokesman.
The SEC alleges that Huttoe caused 47.1 million unregistered Systems of Excellence shares to be issued between March and July 1996 - but the company had only 11.6 million shares outstanding.
The company used Whisper Sheets available to subscribers over a private Internet site to boost its value as well as through quote services. Systems of Excellence now has a new CEO and a new board. Huttoe's case will be heard before Christmas.
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