Internet Financial Publisher Settles SEC Charges

George Chelekis, an Internet publisher once featured in BusinessWeek, settled federal allegations that he failed to adequately disclose payments from more than 150 companies to tout their shares, it was announced Tuesday.

At least six of these companies received coverage from Chelekis that was too favorable, according to a complaint filed by the Securities and Exchange Commission. In fact, these companies issued news releases that denied claims Chelekis made on their behalf, the SEC said.

The news releases didn’t stop Chelekis from continuing to overstate the prospects of the companies, the SEC said. As a result, the agency also charged him with making false statements to his readers.

Without admitting or denying guilt, Chelekis and his publishing companies agreed to pay $162,727 under a settlement with the SEC. The payment includes the surrender of $75,050 in profit, an equivalent penalty and $12,267 in interest.

Michael Schoeman, an attorney who represents Chelekis, said that the publisher was traveling Tuesday and was unavailable for comment.

Several reports cite Chelekis, who publishes under the banner “Hot Stocks,” as one of the first and best-known Internet purveyors of financial information, although at least one of the companies he represented was left unimpressed.

Luminart, a Canadian sign marketer, paid Chelekis $8,800 in November 1994 for publicity. However, the company didn’t like the publicity it got.

Chelekis wrote in the Jan. 17, 1995, edition of “Hot Stocks Whispers” that Luminart would soon get an order for 22,000 signs a month from McDonald’s Corp. Luminart disclaimed the report in a news release issued the same day, the SEC said.

The SEC alleged that Chelekis knowingly made false statements about five other companies: Nona Morelli’s II Inc., Urban Resource Technologies Inc., Advanced Viral Research Corp., Canmine Resources Corp. and Quest International Resources Corp.