An elusive "spammer" is heavily touting shares of a Palm Springs-based originator of gay radio programming.
The mystery e-mailer earlier this month bombarded the Internet with a salvo of "Hot Stocks" newsletters, recommending investments in Triangle Broadcasting Co. Inc. (OTC: GAAY).
Company officials said they know nothing about the barrage of e-mails or their author.
"Nobody was paid by anybody to do that," said Triangle President Frank Olsen. "There's no contract with anyone for that sort of thing."
But in the newsletter's disclaimer, the author claims that - far from being a neutral party or stock analyst - it is a public relations agency paid 500,000 shares of Triangle stock to promote the company.
The newsletter's author could not be conclusively identified or reached for comment.
Hot Stocks' e-mail and Web address - www.directform.com/hotstocks - lead to dead-ends in cyberspace. If there ever was such a Web site, it has been taken down, and no one is listed as having registered its domain name.
This isn't the first time Triangle Broadcasting has been targeted by an online investment newsletter. In September, a stock tip sheet promoting Triangle and calling itself "Stock-pick" circulated on the Web.
The two letters are - aside from the change in names and different descriptions in the subject line - identical word-for-word, down to the disclaimer and a Mark Twain quote.
Sam Meltzer, a bulk e-mailer in St. Paul, Minn., said Triangle paid him 100,000 shares to send the first batch of messages last year.
Triangle officials did not return phone calls seeking comment on Meltzer's assertion.
"We did Stock-pick, but we were not the ones who did it the second time," Meltzer said, referring to this month's Hot Stocks newsletter.
He refused to identify the second spammer, although he said he knew the individual.
"Triangle asked me (to do the second campaign) and I said, 'I'm too busy right now.' I just referred them" to an associate, he said. Meltzer said he wasn't bothered that the second newsletter aped his own. But he did point out some differences that would classify his version as the more honest of the pair.
Unlike the second campaign, Meltzer's Stock-pick newsletter carried the word "ad" in capital letters in the subject line. Meltzer's tip sheet also bore a phone number.
That the second spammer could not be tracked easily may not be his or her fault, Meltzer said.
The e-mail and Web page addresses given in spammed letters are often valid, but only for a short while: As soon as the first rankled recipient complains to an Internet "backbone" provider -carriers like AT&T or MCI - the larger companies often kill the spammer's accounts, he said.
Spammed newsletters and tip sheets are often fraudulent and misrepresent the sender's interests, according to the Securities and Exchange Commission. And they're a common commodity on the Internet, especially when it comes to so-called "microcaps," or thinly traded companies like Triangle.
Promoters typically engage in a scheme called "pump and dump," in which they try to drive up the price of a small stock they own - and possibly represent - then sell their shares when the price rises.
In its first major move to crack down on such abuses, the SEC in October charged 44 Internet-related stock promoters with fraud and other violations.
Although Triangle officials say they've never seen the Hot Stocks online newsletter that recommends their company's shares, one online stock promoter says he's heard of nothing else since March 10.
"We're getting six or seven calls a day" from people upset about receiving the e-mail, said Lance Fortt, a principal with Billington's Jr., a public relations firm that runs a for-hire investment newsletter.
Billington's, which operates print and online newsletters, owns the rights to www.hotstocks.com.
E-mail readers who couldn't respond to the Hot Stocks e-mail's bogus address turned their fury on him, even though he says he only sends e-mails to his own subscribers and Triangle isn't one of his clients.
Fortt said that in 1992, he bought the rights to most of the "good" stock-related domain names with the intention of selling or developing them later.
He said he gets a call from the SEC whenever one of those key words or phrases turns up in junk e-mails.
"What (spammers) do is hide under other people who are legitimate," he said.
"Obviously, this is not a nice position to be in, where you're defending what somebody else has done, when you're in the same type of business as they are."
Peacock Financial Corp. of San Jacinto (OTC: PFCK) is one of Billington's clients, having paid $2,500 for an ad placement on the Billington's Web site and a profile in its newsletter, President Steven Peacock said.
Unlike Billington's, some stock-promoting spammers contact small public companies and pitch their services, rather than the other way around, Peacock said.
"We get faxes from all over the country, saying, 'Get your story out to 50,000 potential investors,'" Peacock said.
Originally published in The Business Press 03/29/99
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