U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission


Litigation Release No. 20198 / July 18, 2007

SEC v. Samuel Aaron Meltzer, Civil Action No. CV 03 770 (Judge Denis R. Hurley) (E.D.N.Y.)

SEC Settles Civil Injunctive Action Against Serial Spammer Samuel Aaron Meltzer

On July 16, 2007, a consent and final judgment against Samuel Aaron Meltzer was entered by the United States District Court for the Eastern District of New York. Meltzer was charged in a previously-filed action with securities fraud in connection with his stock-related spamming activities. Meltzer consented to the entry of the final judgment, without admitting or denying the allegations of the Commission's complaint, except as to jurisdiction.

The Commission's Complaint

The Complaint, filed February 18, 2003, alleged that Meltzer, a professional Internet spammer, used the Internet to commit securities fraud. In return for compensation from stock promoters and issuers, Meltzer sent millions of unsolicited emails and created numerous websites to promote various penny stocks. In order to conceal his identity — and to avoid the detection of web hosts seeking to stop Internet spam — Meltzer operated under at least thirty different assumed Internet identities.

The SEC's Complaint alleged that Meltzer's spam and websites made false and misleading representations about the stock he helped to promote. Meltzer falsely stated that his recommendations represented his own investment opinions based on his review of the issuer's public filings and his interviews with the issuer's management. In fact, Meltzer did not review the issuers' filings, did not interview their management, and simply republished recommendations and representations that he received from the promoters who had hired him. Those promoters received, in some instances, many more shares of stock than Meltzer did, a fact that Meltzer chose not to disclose. Also, in his emails and websites, Meltzer knowingly or recklessly made false and misleading representations concerning the issuers' current business and projections of future performance that had no reasonable basis in fact. Between 1998 and 2001, Meltzer touted the stocks of at least twelve issuers and received at nearly $160,000 in stock and cash as ill-gotten gains as a result of his fraudulent conduct.

The Settlement

The final judgment against Meltzer permanently enjoins Meltzer from violating the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5. The judgment also imposes a penny stock bar against Meltzer. In addition, Meltzer was ordered to pay disgorgement in the amount of $159,619.62 with prejudgment interest in the amount of 89,045.70, for a total of $248,665.32, but payment was waived for the amount exceeding $25,000, and civil penalties were not imposed, based on Meltzer's sworn representations regarding his financial condition.



Modified: 07/18/2007