FOR IMMEDIATE RELEASE: August 17, 1999
Harrisburg, PA, August 17, 1999 - - The Pennsylvania Securities Commission today unveiled an Internet Fraud Unit, calling it a leading-edge weapon in the battle to protect Commonwealth investors from on-line investment scams.
Commissioner A. Richard Gerber said the time has come to necessarily organize its focus on the rapidly growing area of Internet securities fraud, in recognition of the explosion in the multitude of get-rich-quick frauds that are popping up all over the Internet.
"Fully 20 percent of Commission enforcement cases are Internet related," Gerber said. "This is up from zero only four years ago." Gerber oversees the Commission's Division of Enforcement and Litigation.
"It's clear that scam artists see significant growth potential in Internet fraud," Gerber said. "Our job is to help them understand that the Pennsylvania Securities Commission is vigilant in its duty to protect investors, that we are serious about fighting Internet fraud and that perpetrators will suffer severe consequences."
The unit is headed by Jerel A. Hopkins, who is headquartered in the Commission's Philadelphia office. Hopkins, an attorney in the Division of Enforcement and Litigation, also chairs the North American Securities Administrators Association's Internet Neighborhood Watch Referral Project Group and is a member of NASAA's Day Trading Project Group.
"Five years ago hardly anyone had heard of ´Internet fraud´," Hopkins said. "Now, it's hard to get through the newspaper or the nightly news without reading or hearing about it."
He said Internet fraud typically manifests itself in one of two ways: in soliciting victims, usually by using mass e-mails, known generally as "spamming," or as a backdrop for a phony (more) investment scheme. In either case, the technique usually involves the opportunity for substantial growth in a short period of time. Hopkins noted that of the 66 cease-and-desist orders issued by the Commission during the 1998-99 fiscal year, 11 were connected to alleged Internet fraud. Additionally, the Commission staff has conducted 26 investigations relating to the Internet since January. The Commission has gained a national reputation as a pioneer on Internet issues. G. Philip Rutledge, the Commission's deputy chief counsel, who oversees the new unit, was invited to testify before Congress in hearings held last March on Internet securities fraud.
Gov. Tom Ridge welcomed formation of the Internet Fraud Unit, calling it another in a series of initiatives designed to make Pennsylvania a safe place in which to live, work, play and build for the future.
"Pennsylvania has been a national leader in protecting investors, and the Pennsylvania Securities Commission has taken another major step in protecting Pennsylvanians from investment fraud," Gov. Ridge said. "It's another example of the Commonwealth using technology to help our customers Pennsylvania consumers and taxpayers."
Contact:
215-560-7004
Alternate formats of this release may be available on request; call 717/787-1165.