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E-Mail Announced for Fraud Reports

October 15, 1998

WASHINGTON (AP) _ Worried by the growth of financial scams using the Internet, the head of a state securities regulators’ group is asking Internet users to help police suspected fraud.

Peter Hildreth, new president of the North American Securities Administrators Association, said investors can ``look out for themselves and their neighbors on the Net and alert regulators when they see something suspicious.″

The NASAA’s new e-mail address to report suspected financial fraud is: cyberfraud(at)nasaa.org.

When sending a complaint, people should forward the Internet message in question, provide the Web site, if appropriate, and include the name of the state in which they live.

Complaints will be referred to the appropriate state regulators, the Securities and Exchange Commission, the National Association of Securities Dealers and the Federal Trade Commission.

Regulators say financial scams using the Internet have been on the rise in recent years, notably stock price manipulation, illegal pyramid schemes, insider trading and acting as a broker or investment adviser without being properly licensed. The schemes, whose promoters cloak themselves in the anonymity of the Internet, cost unwary investors millions of dollars a year.

Internet Web sites, news groups, chat rooms and e-mail messages are increasingly being used to tout risky penny stocks, according to federal and state regulators.

Hildreth’s group, comprised of securities regulators from the 50 states, the District of Columbia, Puerto Rico, Canada and Mexico, has brought a number of enforcement actions in recent years against Internet frauds, as have federal regulators.

The Securities and Exchange Commission also has an e-mail address for reporting suspected Internet fraud: enforcement(at)sec.gov.

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