Regarding the Taxin show:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 15955 / October 27, 1998
SECURITIES AND EXCHANGE COMMISSION v. EDWARD B. TAXIN and
THE TAXIN NETWORK, 98 Civ. 7661 ( KMW) (S.D.N.Y.)
The Commission filed suit in federal court in New York yesterday against the host of a radio infomercial show, Ed
Taxin. Taxin also publishes an investment newsletter on his
website, Taxin.com. Taxin's show, "The Financial Hour,"
airs on six stations across the country, including New York, and is broadcast from Taxin's Shrewsbury, New Jersey
residence. The Commission charged Taxin and the Taxin
Network with promoting stocks on the Financial Hour and his newsletter, Investors Chronicle, without disclosing that he is compensated for the touts, as follows. The Taxin Network
(owned by Taxin's wife, Joanne Pagano) has agreements with numerous small-cap companies, including Envoy Communications
Group, Inc., PTC Group, Inc., Sungold Gaming International Inc., Telepad Corp., VentureTech, Inc., and Wolf Industries,
Inc. These companies or their agents have paid the Taxin
Network at least $200,000 in cash or stock for promotional services, including exposure on the Financial Hour and in
the Investors Chronicle. On the Financial Hour, Taxin
introduces a series of guests, including promoters from
investor-relations firms and officers of the companies.
Taxin joins with his guests in their rosy predictions for
the companies they represent, mixing in Wall Street patter to convey the impression of objective financial reporting.
Taxin introduces the promoters as Wall Street notables and stock-pickers, disguising their relationship with the
companies they represent.
The compensation received by the Taxin Network is not adequately disclosed on the radio show or in the newsletter.
The only disclosure on the radio show is generally that the
guests (or some of the guests) have paid a fee to appear on
the show or that Taxin owns shares in some of the companies
discussed. Taxin's internet site contained no disclosure at
all of the compensation until Taxin was contacted by the
Commission's staff; the new disclosure is not adequate. The
Commission, seeking a permanent injunction and penalties,
alleges that Taxin and the Taxin Network are in violation of
Section 17(b) of the Securities Act of 1933, which requires
that all such compensation, and its amount, be fully
disclosed. |
