sue of insider trading, made easier by anonymous bulletin boards and chat rooms. In his speech at the National Press Club, SEC Chairman Arthur Levitt comments that “they(chat rooms) have been compared to a high-tech version of morning gossip or advice at the company water cooler. But at least you knew your co-workers at the water cooler. That just isn’t true on the Internet, and I hope investors recognize that.” He goes on to compare regulation in chat rooms to a neighborhood watch program, saying that this will be a primarily investor-regulated field. With regard to false press releases and junk email touting small or nonexistent stocks, most of these perpetrators are traceable. Investors, however, should be extremely cautious when relying on these dubious sources of information, and should definitely consult several additional independent sources of information before making a decision. Some recommendations issued by the SEC are as follows.1.“Get financial statements from the company and be able to analyze them;2.Verify the claims about new produce developments or lucrative contracts;3.Call every supplier or customer of the company and ask if they really do business with the company; and4.Check out the people running the company and find out if they’ve ever made money for investors before.” In addition, the SEC is actively prosecuting Internet fraud allegations, and have achieved more that a few indictments. ConclusionThe SEC has been regulating the exchange of securities for many years, and the question they now face is how to impart some form of regulation to the Internet, and when. At what point does the World Wide Web rise above the floor of the stock exchange in sheer volume of trades, and is it wise to wait until then? These are questions that have yet to be answered.As for the Wall Street brokerage firm, it has already begun to evolve with the Internet, and will most likely continu...
