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Emulex Fraud Suspect's Assets Stay Frozen

September 12, 2000|Reuters

A U.S. district judge agreed to extend a temporary restraining order that freezes the assets of Mark Jakob, a key suspect in one of the biggest cases of securities fraud over the Internet. Jakob, 23, was arrested Aug. 31 on suspicion of sending a false news release with negative information about Costa Mesa technology firm Emulex Corp. that was disseminated over Internet Wire, where he had worked. The Securities and Exchange Commission froze more than $400,000 in assets held by Jakob, believed to include $241,000 in profits from the scam. The temporary restraining order and asset freeze were extended until Oct. 2, SEC attorney Cliff Hyatt told Reuters. A hearing is set for that date. Jakob appeared in federal court in Riverside. The false release Aug. 25 sent Emulex's market capitalization plunging $2.5 billion by slashing its stock price by more than half. SEC and FBI officials said the scam was an attempt by Jakob to recover nearly $100,000 of unrealized losses from short-selling Emulex stock. Jakob is scheduled to be arraigned Monday on one count each of securities and wire fraud, which carry a possible sentence of 15 years in prison.

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