Legal Question in Securities Law in New York

purchasing stocks due to news on the internet and getting wiped out

back in march of 2000 i purchased stock for two separate companies based solely on news on the internet and cncb. both companies now trading at less than a $1.00 - i have total losses of approximately $16,000. i believe the stories were bogus and i would like to sue each company.

The companies are Econnect and Adatom Inc.

Do I have a case? I want to sue them. I've taken many loss on stock purchases but these two companies, I believe were pumped and dumped on purpose. I may not be a big time stock buyer but I would like some compensation other than a loss on my tax return.

Please advise,

thank you,


Asked on 1/25/02, 2:59 pm

1 Answer from Attorneys
John Friedman Law Office of John K. Friedman

Re: purchasing stocks due to news on the internet and getting wiped out

Dear Sir or Madam:

If you can prove the news stories you read 1) were false, and 2) that the companies knew they were false when they released the press release that underlied the Internet and CNBC stories you relied on, then you may well have a case. Of course, you will likely find that the stock is trading below $1 for a reason--because both companies are in the can and between them might not have $16,000 to pay you.

You will have a difficult time proving that the companies knew the information was false in the first instance anyway because, absent a papertrail or smoking gun, it is very difficult to prove what anybody "knows" and when they "knew" it.

Sorry, but that's the best I can do.

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Answered on 1/25/02, 4:11 pm


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