U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19221 / May 10, 2005

SEC v. Invest Better 2001, Cole A. Bartiromo, and John/Jane Does 1-10, 01 Civ. 11427 (BSJ)(S.D.N.Y. filed January 7, 2002)("IB2001")

SEC OBTAINS ORDER IMPOSING $1,273,731 CIVIL PENALTY AGAINST COLE A. BARTIROMO, WHO, AT AGE 17, ENGAGED IN AN INTERNET PUMP AND DUMP SCHEME AND ORCHESTRATED A FRAUDULENT UNREGISTERED INTERNET OFFERING

The Securities and Exchange Commission ("Commission") announced that on May 4, 2005, United States District Judge Barbara S. Jones of the Southern District of New York entered an Order granting the Commission's motion for a preclusion order and summary judgment against Defendant Cole A. Bartiromo and Defendant Invest Better 2001 ("IB2001"), Bartiromo's Internet alias. The Order (1) precludes Bartiromo from introducing certain evidence based on his refusal to answer deposition questions and invocation of his Fifth Amendment privilege; (2) finds that Bartiromo and IB2001 violated Sections 5(a), 5(c) and 17 (a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (3) finds Bartiromo liable for ill-gotten gains of $47,216 in addition to the more than $1 million of gains the defendants previously disgorged to the Court; and (4) imposes a civil penalty against Bartiromo in the amount of $1,273,371. The Court found the civil penalty to be appropriate because, among other things, "the boldness of the fraud conclusively demonstrates the Defendant's high level of scienter, and because the risk of loss and the actual loss was substantial. The scheme ensnared approximately 5,000 victims, and would have continued to mushroom had Bartiromo not been caught." Previously, on May 29, 2002, the District Court issued an Amended Partial Final Judgment and Order, on consent, which permanently enjoined Bartiromo and IB2001 from violating the above registration and antifraud provisions of the federal securities laws, directed Bartiromo and IB2001 to repatriate all assets outside the United States and deposit such assets into the Court's account, froze Bartiromo's and IB20001's assets and granted other relief.

In its first amended complaint, filed January 7, 2002, the Commission alleged that Bartiromo raised more than $1 million from more than 1,000 investors through a scheme known as "Invest Better 2001," which, from at least November 1, 2001, purportedly offered "guaranteed" and "risk-free" investment programs in which IB2001 pooled investors' funds to bet on sporting events, and promised to repay investors between 125% and 2500% of their principal within specified periods ranging from three days to several weeks.

In its second amended complaint, filed April 29, 2002, the Commission alleged that Bartiromo conducted an Internet pump-and-dump scheme in which he manipulated the stock price of fifteen publicly traded companies from approximately May 14, 2001 to July 5, 2001. More specifically, Bartiromo disseminated numerous false and misleading messages concerning publicly traded companies on the Internet. The complaint alleges that for each manipulation Bartiromo purchased large blocks of stock, consisting in some cases of nearly 50% of the volume on that day, then posted thousands of identical false messages on Internet message boards, and subsequently sold his entire position. According to the second amended complaint, Bartiromo posted over 6,000 messages and traded several million shares of the fifteen companies in this manner, and, as a result, generated a net profit of over $91,000.

For additional information, see Litigation Release Nos. 17272, 17296, 17493, 17540.

http://www.sec.gov/litigation/litreleases/lr19221.htm