Software executive pleads guilty, cooperates in securities probe
ALEXANDRIA, Va. (AP) _ A former Internet stock promoter admitted today he conspired to drive up the price of his company’s stock by making fraudulent and rosy claims about the business.
Charles O. Huttoe pleaded guilty in U.S. District Court to securities fraud and money laundering. He was sentenced to 46 months in prison and two years of probation. Huttoe also was fined $10,000.
His punishment was the least allowable under federal sentencing rules, because of what federal prosecutors called his ``extraordinary cooperation″ in investigating a wide-ranging stock manipulation case.
Huttoe has cooperated in secret since a week after the Securities and Exchange Commission charged that he reaped more than $10 million from orchestrating the increase in price of shares in his company.
Systems of Excellence makes video teleconferencing equipment. It has offices in McLean, Va. and Coral Gables, Fla.
The SEC named Huttoe along with five others in a securities fraud lawsuit filed Nov. 7 in U.S. District Court in Washington.
A month later, the SEC said the scope of the scheme was larger, involving about $12 million. The SEC said then that Huttoe, who was the video company’s chairman and chief executive officer, manipulated the market by issuing false, favorable press releases about Systems of Excellence. He then sold shares into an inflated market, and secretly distributed millions of the company’s stock shares to his mother, wife and niece, the SEC said.
Huttoe admitted the conspiracy and apologized today.
``I apologize to those who trusted me,″ the Florida businessman said in a halting voice.
U.S. District Judge James Cacheris could have sentenced Huttoe to as many as 57 months in prison on the two counts. Huttoe potentially faced many more charges if he had not cooperated with prosecutors.