EarthLink Co-Founder a Pyramid Schemer?
Can anyone explain the recent rash of white-collar crime exposŽs? First a
Cisco boss got fired and busted for embezzling. Former leaders of
Christie's and Sotheby's were indicted for auction price-fixing. Lernout &
Hauspie's founders have been languishing in Belgian jails during their
investigation for stock manipulation and fraud. Now a co-founder of
EarthLink has been tied to a bizarre Ponzi scheme involving day-trading
and Scientology.
The Los Angeles Times broke the story that Reed Slatkin, venture
capitalist co-founder of the ISP EarthLink, is accused of bilking
investors of more than $35 million. Slatkin is not registered with the SEC
as an investment advisor, but he still persuaded more than 100 people to
invest more than $300 million in a day-trading operation promising annual
returns of up to 60 percent. It seems he used money from earlier investors
to pay later investors - the same theory behind those chain letters that
promise to make you rich if you send five people a dollar. Slatkin, a
Scientologist, is also accused of ripping off a group of fellow church
members to the tune of $250 million. EarthLink hurried to explain that
Slatkin quit the company's board last week, wasn't part of the company's
daily operations, and didn't use EarthLink money in the scheme.
Meanwhile, observers continued to ponder EarthLink's rollout of satellite
Net access. The NewsFactor Network quizzed an analyst, who said rural
customers craving broadband will sign up for the costly service because
they can't get cable modems or DSL. (But how many such customers are
there?) "EarthLink now offers virtually every kind of consumer Internet
access imaginable," said the Motley Fool, but it's still having trouble
keeping up with behemoths such as AOL and Microsoft. Well, EarthLink, if
you need come quick cash, we know this great day-trading program with 60
percent return ...
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TheStandard.com
Thursday May 3
By Jen Muehlbauer
http://biz.yahoo.com/st/010503/24186.html
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