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May 28, 1999|Bloomberg News

Hitsgalore.com Inc. shares fell 17% after the Rancho Cucamonga-based Internet advertising company said its founder and majority shareholder spent 10 months in federal prison after being convicted of wire fraud in 1992.

It's the second disclosure of a brush with the law for Dorian Reed this month. On May 11, it was reported that a federal judge ordered Reed and his wife, Audrey, to pay $613,110 to 100 customers they defrauded at another Internet firm two years ago. The Reeds were sued by the Federal Trade Commission.

Reed temporarily resigned as director and chief technology officer pending the FTC investigation. He remains "a key person who provides services to the company," according to a filing with the Securities and Exchange Commission that disclosed his conviction.

Hitsgalore.com shares have slumped 75% since May 11. They fell $1.06 to close at $5.06 in over-the-counter trading.

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