Joanne Colt, a Colorado Springs city council member, and her son Douglas Colt, a law student at Georgetown University in Washington, agreed to settle SEC charges that they formed a Web site to regularly hype four stocks. After driving the stocks up as much as 700 percent, they and the younger Colt's friends sold their securities in February and March 1999, the SEC contended.
The SEC waived payment of penalties because of the five defendants' inability to pay. The defendants agreed to be subject to stiffer sanctions if they commit similar violations in the future. They neither admitted nor denied misconduct.
The case is the latest in the SEC's two-year crackdown on Internet stock abuses. Most of the early cases involved stocks allegedly manipulated by company insiders and promoters who were paid to exaggerate the stock's potential. A couple of more recent cases have focused on individuals with no company affiliation who used the Web to push stocks they owned.
Joanne Colt was elected last April as one of nine members of the city council of Colorado Springs, the second largest city in the state with a metropolitan area population of about 500,000. The city is home of the Air Force Academy and the Fort Carson Army base.
The other defendants who attended Georgetown University are Adam Altman, Kenneth Terrell and Jason Wyckoff. Their lawyers couldn't immediately be reached for comment. The university wasn't accused of any wrongdoing.
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