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BRIEFLY / SECURITIES

Day Trader Held in Profit-Warning Scheme

March 31, 2000|Bloomberg News

A Houston day trader was arrested and charged with posting a fake profit warning for Lucent Technologies Inc. on a Yahoo Internet message board last week, driving Lucent stock down 3.6% and cutting the company's market value by more than $7 billion. The share price rose after Lucent said it hadn't issued the warning. Federal prosecutors said Fred Moldofsky, 43, traded about 6,000 shares of Lucent stock March 22, the day he allegedly posted the phony press release. Authorities didn't disclose the results of Moldofsky's trading activity that day. "Law enforcement officers were able to quickly identify Moldofsky, despite his efforts to remain anonymous," U.S. Attorney Mary Jo White said in a statement. "By collecting evidence from Yahoo, America Online and Moldofsky's Internet service provider, authorities identified Moldofsky and the location" of his computer. Moldofsky, who was charged with securities fraud, faces up to 10 years in prison and a $1-million fine. Shares of Lucent, based in Murray Hill, N.J., closed unchanged at $63.25 on the NYSE.

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