2 Indicted on Fraud Charges in Stock Case

A federal grand jury in Los Angeles indicted two Southern California men, accusing them of conspiracy to commit securities fraud and wire fraud by posting bogus e-mail messages to pump up investor interest in a thinly traded stock they owned. By using screen aliases to post e-mails on electronic bulletin boards, the men caused a run-up in the price of NEI Webworld, a bankrupt firm, from 13 cents to more than $15, the U.S. attorney’s office said. Prosecutors said Arash Aziz-Golshani, 23, of Beverly Hills, who recently graduated from UCLA, and Hootan Melamed, 23, of Pomona hid their identities by posting messages from public computer terminals at a UCLA library. The messages said NEI was about to be taken over by LGC Wireless of San Jose. Prosecutors say the men raked in about $362,625 in profit. Randall Sunshine, an attorney for Aziz-Golshani, said his client denies the charges and that “the government is in uncharted territory in attempting to apply the securities fraud statutes to Internet message board postings.” Melamed’s attorney, Mark Werksman, has said his client denies the charges. If convicted, each defendant could face 15 years in prison.