Fugitive Ordered to Pay $1.2 Million
A fugitive tree trimmer was ordered by a federal judge to repay $1.2 million, on charges he illegally made $1.4 million by selling shares of San Pedro-based EConnect after he recommended that others purchase the stock.
Stephen Sayre, 44, promoted EConnect shares in four bullish reports, under the name of Independent Financial Reports, distributed in news releases over Business Wire, authorities said. The Securities and Exchange Commission alleged Sayre’s reports misled investors because he falsely claimed he didn’t own any EConnect stock.
U.S. District Judge Margaret Morrow in Los Angeles ordered Sayre to pay back $1 million to investors, along with interest of $75,582.59 and a $110,000 penalty.
Sayre, who operated a tree-trimming business, disappeared after a warrant was issued for his arrest in April 2000 on related securities fraud charges.
Sayre’s first report, on Feb. 29, 2000, predicted EConnect’s stock price would move to $25 in the short term. EConnect republished that report on the Internet and its shares, which traded for as little as $1.52 that day, soared to as much as $21.88 in two weeks.
“I’d imagine our press release definitely helped the company’s share price,” Sayre said in an interview at an outdoor cafe in Marina del Rey shortly before he disappeared. “We had no idea it would have such an extraordinary response.”
Sayre’s fourth and final report, on March 8, predicted EConnect shares would trade for as much as $135 within a year.
“I felt it was reasonable,” Sayre said of that price target in last year’s interview.
EConnect, which lost $114.7 million last year, now trades at 7 cents a share.
The company, which has no sales, is developing a method to let consumers use a mouse-like device to swipe their credit card when doing business on the Internet.
The SEC halted trading in EConnect last year after questioning the accuracy of news releases issued directly by the company. The agency later sued EConnect and Thomas Hughes, its chief executive, for securities fraud. The suit was settled after they agreed not to commit securities fraud in the future.
