Posted on: Tuesday, February 8, 2005
Commentator arrested in alleged stock fraud
By Joyzelle Davis and David Evans
Bloomberg News Service
NEW YORK — A financial commentator who appeared on CNBC, CNN and Bloomberg Television was arrested on charges of failing to disclose that he received more than a million dollars in cash and stock from a marketing company whose shares he touted.
Smith promoted the stock of now-defunct GenesisIntermedia Inc. as a "very hot speculative pick" and "very cheap from my perspective" during TV appearances from late 1999 to mid-2001, according to the indictment.
Unknown to viewers, Smith received $100,000 cash and 72,000 shares in the company valued at $1.2 million.
Smith appeared yesterday in New York federal court and was released on bond.
Smith's recommendation of GenesisIntermedia as a "Double Your Money Pick" during a Feb. 25, 2000, appearance on CNBC Market Watch prompted the company's shares to rise 58 percent. The company reported losses of $8.2 million in 1999, $33.5 million in 2000 and $119 million in the first three quarters of 2001 before it shut down.
Van Nuys, Calif.-based GenesisIntermedia was controlled by Saudi financier Adnan Khashoggi's Bermuda-based Ultimate Holdings Ltd.
Courtney Smith, 53, was arrested at his Manhattan apartment yesterday after a nine-count indictment from a federal grand jury, according to the U.S. attorney's office in Los Angeles. If convicted of all counts, he could face as much as 45 years in prison.
