Be wary of what's on the Bullboards - Read OnTitle: Welcome to the World Wide Grapevine.
Internet bulletin boards are making it easy
for the public to engage in libel and trade on
insider information, while masking the culprits
and leaving the victims powerless.
TYLER HAMILTON
Technology Reporter
Saturday, May 6, 2000
For the full article please go to www.globeandmail.com
...
A peek at one site reveals the influence of some posters. On Stockhouse.ca, a discussion group for SKG Interactive Inc. had a
frequent poster named Tipstotrust. SKG -- a former mining company listed on the Toronto Stock Exchange and now operating as an
Internet firm -- is a penny stock that Tipstotrust continuously pegged as a $3, then $6, then $8 stock.
Some of the other posters accused Tipstotrust of pumping and dumping the stock with the help of multiple on-line identities, while
others would cling to every one of the author's words. Tipstotrust's influence grew so strong that for several days in a row the poster
would hold well-attended midnight sessions to reveal the latest hot tip.
Colin McCann, an investigator with the enforcement branch of the Ontario Securities Commission, says securities regulators across
North America recognize that posters on Internet chat rooms often cross the line between freedom of speech and breaking the law.
+We all know it's a difficult problem,+ Mr. McCann says. +We are working all the time with agencies in the U.S. to get behind the
name and identity of postings. While we all agree it's something we're going to work at, I don't think the mechanisms are in place
yet.+
Meanwhile, the Web sites hosting chat rooms compare themselves to telephone companies -- they admit they're the instrument of
transmission, but assert they have no control over content.
+We're not publishers, we're a forum where people can express themselves,+ says Nektarios Boutsalis, director of bullboards at the
New York office of Vancouver-based Stockhouse Media Corp.
Stockhouse.com operates in Canada, the United States, Australia, Hong Kong and the United Kingdom, and has quickly become
one of the leading Web sites in this country for investor information and chat rooms on the Internet.
Mr. Boutsalis says the site gets 3.6 million visitors a month, adding that it would take a court order to force the company to violate
the confidentiality of its users and turn over their names.
The more popular discussion groups on Stockhouse.com deal with micro firms that are usually technology-related and have a small
public float that's easy to manipulate.
+If a stock is moving for no apparent reason, that's one of the places you can check, the chat lines,+ says Branden Osten, an
analyst with Sprott Securities Ltd. in Toronto. +It's easier to move stock with low liquidity.+
That would make many of the companies on the Canadian Venture Exchange a natural target.
Over at the British Columbia Securities Commission, Langley Evans, deputy director of investigations, says there are resources
devoted to dealing with Internet-related securities violations. But they're no match for the Internet, where tracking down the identity of
users is like looking for a needle in a haystack full of pinheads.
+It requires that court order,+ he says. +But even then, we're not certain of absolutely confirming the identity behind the postings.+
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I wonder is +someone's+ rantings lately of insider trading has been noticed....