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 | During the afternoon of March 22, Moldofsky posted several messages
using the alias "kahuna_and_the_brain" reporting rumors that Lucent
would not meet quarterly earnings projections.
| In the evening of March 22, Moldofsky posted a message using the
alias "hot_1ike_wasabe" with the headline "LUCENT RELEASES EARNINGS
WARNING!DAMN!" The text of that message purported to be a copy of a
Lucent press release announcing that it would not meet analysts'
earnings estimates for the quarter ending March 31, 2000. In fact,
Lucent had issued no such release.
| Beginning at 7:56 that evening and continuing through the end of the
morning on March 23, Moldofsky reposted that press release 20 times
using the alias "F1oydian_us." Moldofsky had created that alias that
day. It was designed to resemble a screen name used by a frequent
commentator on the Lucent message board, who historically had expressed
a positive view of Lucent stock. The reposted messages bore a variety of
lurid headlines emphasizing the disastrousness of the news and/or the
genuineness of the release.
| While he was posting and reposting the fraudulent press release,
Moldofsky posted additional messages using other screen names that
commented on the release or on the poster's conduct.
| Lucent stock closed on March 22 at $62.625, down $2.625 from the
opening price that day. On March 23, Lucent opened at $62.125 and traded
as low a $60.375 before the fraudulent press release was disavowed.
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The complaint alleges that Moldofsky violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. It seeks an order permanently restraining and enjoining him from future violations of those provisions, as well as civil penalties.
http://www.sec.gov/litigation/litreleases/lr16493.htm
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Modified:04/04/2000 |