According to ASIC, Victorian Steven George Hourmouzis and Queenslander Wayne John Loughnan sent unsolicited emails to an estimated 4 million email addresses worldwide, claiming shares in Nasdaq-listed technology company Rentech would soon inflate 900 per cent. The internet billboard messages claimed the same.
The investment watchdog said in a statement that the emails and billboards issued by the two Australians advised investors that Rentech share prices were expected to balloon from $US0.33 to more than $US3.00 "in the next few months", immediately that company made public a series of pending patents.
Accordingly, Rentech stock prices doubled the next trading day, with its trading volume increasing to more than 10 times the previous month, ASIC said.
ASIC began its investigation in May 1999, after the US Securities and Exchange Commission (SEC) gave ASIC information that led to the finding of the two culprits. In August, Rentech, which began trading on the Nasdaq in 1991, ceased trading.
ASIC charged the men with 19 criminal offences, including persuading traders to deal in shares by publishing a forecast they knew to be false and "carrying on" a securities business without a dealer's or investment licence.
SEC has already commenced civil proceedings against the two Australians in the US.