Innocent Plea Made in Phony PairGain Web Report

Gary Dale Hoke pleaded innocent Monday to federal charges that he fabricated an Internet news report to drive up the stock price of PairGain Technologies Inc., Tustin-based manufacturer of telecommunications equipment.

Hoke, a former PairGain engineer, was ordered to stand trial July 6 in federal court in Los Angeles on five counts of securities fraud. If found guilty, he would face up to 10 years in prison and a $1-million fine. He is free on $50,000 bail.

Hoke, 25, is accused of posting a fake report suggesting that PairGain was about to be acquired by an Israeli company. The story was designed to look as if it had been posted on a Bloomberg News Service Web site.

The April 7 hoax pushed PairGain stock up 31% but the price fell back when the company issued a statement denying such a deal was in the works. Prosecutors have said the hoax was carried out without the knowledge of company officials.

Hoke was arrested at his Raleigh, N.C., home after the FBI traced Internet addresses to him.