Stock Fraud Alleged

September 1, 2000

A 23-year-old California student by name of Mark. S. Jakob has allegedly been arrested for releasing a fraudulent news report, over the Internet, on Emulex Corp. For those who keep up with the Nasdaq, the recent drop of Emulex Corp. from $113/share to $43/share was supposedly caused by Jakob’s counterfeit proclamation that the CEO of Emulex had resigned, and that the company was editing their quarterly earnings to show a loss instead of the profit originally reported. Upon learning of the news through the Internet, investors promptly dumped their shares of Emulex that very day.

Jakob’s intent and motivation was supposedly spurred by the fact that he had shorted Emulex stock when the price actually rose, incurring a loss of $97,000. After releasing his fraudulent news release, he “profited” $250,000, as well as collecting criminal charges of wire fraud and securities fraud. Emulex, fortunately, regained most of its losses after it was made public that the news release was false.

Advice

Investors and stockmarket players beware: What you read isn’t what you may think. Be conscientious of what you read and the sources that report them. And most importantly, be aware that there are individuals in this world capable of manipulating the Internet.