SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 17095/ August 8, 2001

SEC SETTLES SECURITIES FRAUD CHARGES AGAINST FRED MOLDOFSKY

Securities and Exhange Commission v. Fred Moldofsky, U.S.D.C. for the Southern District of New York, Civil Action No. 00 Civ. 2425 (LTS)

The Securities and Exchange Commission announced today that it has reached a settlement with Fred Moldofsky to resolve a civil action alleging violations of the antifraud provisions of the Securities Exchange Act of 1934. Moldofsky, a Canadian citizen and a resident of Texas, is a day trader.

The complaint, filed in the United States District Court for the Southern District of New York on March 30, 2000, alleges that on March 22 and 23, 2000, Moldofsky made a series of materially false and misleading statements about Lucent Technologies, Inc. on a Yahoo! Finance message board. According to the complaint, he did so by posting at least twenty fraudulent press releases announcing that Lucent would not meet analysts' earnings estimates for its fiscal quarter ended March 31, 2000.

Moldofsky consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment permanently enjoining him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. A civil penalty was not imposed based on Moldofsky's sworn representation in his Statement of Financial Condition submitted to the Commission.

In a related criminal proceeding, on March 8, 2001, Moldofsky was convicted by a jury of securities fraud for his false postings relating to Lucent. Moldofsky is scheduled to be sentenced in September 2001.

The SEC acknowledges the assistance provided by the U.S. Postal Inspection Service and the U.S. Attorney's Office for the Southern District of New York in connection with this matter.