SEC Judgment Against Momentum Stock Site

SEC Judgment Against Momentum Stock Picking Site

By Mark J. Astarita, Esq.  

The SEC announced that on May 25, 2001, the U.S. District Court in Eugene, Oregon entered judgments against Jared R. Leisek and his brother, Byron J. Leisek. According to the SEC, its complaint, filed on March 1, 2001, alleged that the defendants operated a “momentum” stock picking website called (TnT), through which the brothers issued stock recommendations on the website and via e-mail newsletter to more than 13,000 TnT subscribers.

After the recommendations were released, the price and trading volume of the profiled stocks rose dramatically, often more than doubling the pre-recommendation levels. The SEC alleged that the defendants posted false information on a Yahoo! Club message board frequented by TnT’s subscribers. The SEC also alleged that the defendants falsely claimed, among other things, that TnT’s representatives held no more than 5,000 shares of any stocks profiled on the website and that TnT’s representatives would never sell shares until thirty minutes after issuing a recommendation.

In fact, the complaint alleged the defendants usually held more than 20,000 shares and sold most of their shares within thirty minutes of the release of the recommendations. The defendants are alleged to have made $195,994.50 in profits from the scheme.

Without admitting or denying the allegations contained in the complaint, the defendants consented to the entry of judgments permanently enjoining them from future violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and ordering them to pay disgorgement totaling $195,994.50 and prejudgment interest thereon

As it has done in the past, the SEC waived payment of the disgorgement amounts, and did not assess civil penalties based upon the defendants’ demonstrated inability to pay such sums, according to the SEC

The SEC’s press release is available at

Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.  


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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.