Day trader convicted for posting phony Lucent earnings warning
Saturday, March 10th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ A day trader has been convicted of securities fraud for posting a bogus press release on the Internet that caused the stock of Lucent Technologies to drop last March.
Fred Moldofsky, 44, of Houston, Texas, was convicted of posting a false press release on a Yahoo! Inc. message board, the U.S. Attorney for the Southern District of New York said Friday.
The releases said that Lucent expected its earnings for the second quarter were going to fall short of analysts' expectations.
The false announcement sent a ripple through Wall Street, causing the value of Lucent's stock to fall as much as 3.6 percent the next morning, from $62.62 to $60.37.
When it was determined later that day that the press releases were fake, Lucent's stock rose approximately $5 a share in eight minutes, officials said.
Moldofsky faces up to 10 years in prison and a fine of $1 million. He is scheduled to be sentenced on June 11.