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Jerome Armstrong

Newark, NJ: (Aug-09-07) The US Securities and Exchange Commission brought a lawsuit against influential liberal blogger Jerome Armstrong, the founder of MyDD and an originator of the net roots movement, alleging that he touted a stock on internet message boards without disclosing his financial interest in the company. The complaint, filed in April 2003, alleged that beginning on March 6, 2000, Armstrong touted the stock of BluePoint Linux Software Corporation by posting unsubstantiated, favorable buy recommendations on the Raging Bull internet site. Armstrong posted over eighty such recommendations during the first three weeks that the stock of BluePoint was publicly traded.

According to the complaint, Armstrong praised BluePoint's investment value and encouraged investors who were experiencing trouble having their orders filled to keep trying. The complaint further alleged that the promoters of BluePoint were secretly transferring stock in three other companies to Armstrong at prices below the then current market for those three stocks and that Armstrong made at least $20,000 by selling the shares he received from the promoters of BluePoint. The suit stated that along with business partner Markos Moulitsas, Armstrong helped spark the net roots movement, an internet fueled effort to elect Democrats and counter conservative success in other media. In a settlement reached, Jerome Armstrong agreed to pay $29,000 in fines and penalties to settle the 2003 SEC suit. [WATCHING THE WATCHERS: STOCK TOUTING]

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Published on Aug-11-07


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