Men charged in spam-fueled stock scam

Two Texas men have been charged with cheating investors in a $4.6 million stock scam.

Two Texas men have been charged with cheating investors in a $4.6 million stock scam.
The Securities and Exchange Commission has filed securities fraud charges against Darrel Uselton and his uncle, Jack Uselton.
The complaint, which was filed in the U.S. District Court in Houston, alleges that the two men ran a series of spam e-mail campaigns using botnets—networks that forward spam or viruses to other computers—to anonymously flood the inboxes of American investors with millions of spam e-mails touting near-worthless penny stocks.
The men illegally profited during a 20-month “scalping” scam by obtaining shares from at least 13 penny stock companies and selling those shares into an artificially active market.
The scheme was thwarted when an SEC enforcement attorney received one of the spam e-mails at work.
Both men
In related enforcement actions, the Attorney General’s Office for Texas and the Harris County District Attorney’s Office indicted the Useltons for engaging in organized criminal activity and money laundering and seized more than $4.2 million from bank accounts associated with the Useltons.
Darrel Uselton was disciplined by the NASD in 2004 and 2005.
Jack Uselton was permanently enjoined by the SEC for violating the anti-fraud provision in a 2002 settled action.
The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties, as well as penny stock bars against the Useltons.