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The former CEO of the Homestore, now Move, Inc., has been convicted of insider trading and conspiracy to defraud investors. The company bought their own revenues to increase market value of the company during the tech bubble. Homestore and Stuart Wolff were not the only ones to do this, AOL and many others did the same thing.

What is interesting is that in the future if this will stop other CEOs from committing this fraud in the future.

Prosecutors filed charges against Wolff and other former executives after a probe into what authorities said were a series of fraudulent transactions in 2001 designed to inflate the Westlake Village-based company’s online ad revenues.
Prosecutors said Homestore would pay some vendors, including AOL, Cendant and others, extra for their products or services and the vendors would turn around and use the money to buy advertising from two media companies.
The media companies, in turn, would buy advertising from Homestore, whose officials would improperly list the revenue on the company’s financial statements in order to exceed Wall Street analysts’ expectations.
Prosecutors argued during the two-month trial that Wolff must have known about the $86 million in deals that other executives have acknowledged were fraudulent.
“You can’t buy your own revenue,” Assistant U.S. Attorney Douglas Fuchs told the jury in his closing arguments. via the AP Wire

Related posts:

1. Homestore Changes Name and Focus to “The Move”
2. Denver Broker Convicted and Sentenced for Mortgage Fraud
3. San Diego Real Estate Fraud Ring Convicted
4. Mortgage Fraud Aggressively Investigated and Prosecuted in Colorado
5. Pinnacle Development Partners Gene O’Neal Pleads Guilty To Fraud Charges