Trader faces jail for sending false information on internet

A US trader posted a bogus press release on the internet that caused the stock of Lucent Technologies to drop last March.

Fred Moldofsky, aged 44, of Houston, Texas, has been convicted of securities fraud. He posted the press release on a Yahoo! Inc. message board, the US Attorney for the Southern District of New York said Friday.

Moldofsky faces up to 10 years in prison and a fine of $1m. He is scheduled to be sentenced on June 11.

The releases said that Lucent expected its earnings for the second quarter were going to fall short of analysts' expectations.

The false announcement sent a ripple through Wall Street, causing the value of Lucent's stock to fall as much as 3.6% the next morning, from $62.62 to $60.37.

When it was determined later that day that the press releases were fake, Lucent's stock rose approximately $5 a share in eight minutes, officials said.