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SEC, CBS columnist settle fraud charges

Calandra's fined $540,000

WASHINGTON — The Securities and Exchange Commission has reached a settlement with a former CBS MarketWatch.com columnist it had accused of fraud.

The columnist, Thom Calandra, agreed to pay more than $540,000 to dismiss federal charges that he illegally profited by secretly selling stocks shortly after his investment newsletter’s positive recommendations of the stocks caused their prices to rise.

According to the SEC, Calandra made more than $400,000 through a practice known as “scalping” — buying shares of thinly traded, small-cap companies, writing highly favorable profiles recommending the companies to his readers and then selling the majority of his shares when the increased demand drove up the stock price. From March to December 2003, Calandra followed this “buy-write-sell” pattern for 23 stocks that he covered in the Calandra Report — never once mentioning the fact that he had a personal stake in the companies, the commission claimed.

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“Calandra betrayed his readers’ trust by surreptitiously using his newsletter … to bolster his personal trading profits,” said Helane L. Morrison, an SEC district administrator. “Calandra’s readers were entitled to know about his trading activity, so that they could evaluate the credibility and impartiality of Calandra’s investment advice for themselves.”

While he agreed to pay the fine, Calandra admitted no wrongdoing. “I am happy to have finally reached a settlement with the SEC on this matter,” he said. “It has been a challenging year, to put it mildly, and I do not wish to expose my family to a protracted public dispute with the commission on this matter. Now that we have a resolution, I am eager to move on with my life and pursue my first love, writing.”