"Although he considers himself a journalist, Chelekis makes many joumalists cringe by accepting thousands of dollars in 'research and promotional fees' from companies he covers and trading in some of the stocks he writes about."

"Chelekis says he does nothing wrong and that Canadian journalists are jealous because he scoops them on big stories. One of those journalists, a reporter for the Vancouver Sun, is suing him for libel. So far, however, no government agency has made any move to censure Chelekis."

by Helen Huntley
St. Petersburg Times, July 31, 1995

Got a computer and a modem? Douglas Gerlach and George Chelekis have the welcome mat out for you.

Gerlach's "Investorama" and Chelekis' "Hot Stocks Review" are among the hundreds of options available to investors hunting financial news and information with their home computers. This online treasure chest includes the tedious and boring, the sales pitches and the seams - and, if you look long enough, the truly useful.

A little more than a third of U.S. households have personal computers, and the number is growing each month. As it does, so does the quantity and the importance of online information. Details once available only to money managers and stockbrokers are now accessible to the smallest of small investors. Financial reports, company news and analyst opinions are all available online if you can figure out where to look.

The hottest spot these days is the World Wide Web, a fast-growing segment of the Intemet, that vast computer network linking businesses, universities and homes all over the globe.

Gerlach and Chelekis are both Webmen, but their products are very different. And their offerings illustrate that the Intemet is both a rich source of information and a wild and woolly place where it's good to keep an eye out for misinformation and self-serving advice.

An investment amateur, Gerlach spends $25 a month to maintain his Web site, which is a directoryiiaunching pad for anyone seeking investment resources on the Web. It takes advantage of the World Wide Web's most distinguishing feature - click on a key word and the Web will bring up the requested site even if it is housed in a computer half a world away. Gerlach, whose paying job is writing grants for a New York theater, says his publishing motives are strictly altruistic.

"It's really tough when you're beginning to get started investing," he said. "Having just been there, I remember what it was like." His Web site contains no advertising and asks for no user fees.

Chelekis, meanwhile, is a Clearwater investment newsletter writer who turned to the Web because it offers a fast and cheap way to reach people. His online "Hot Stocks Review" has been so successful that he's thinking of discontinuing the printed version.

"You can E-mail 100,000 people for 25 cents," Chelekis said. He charges electronic subscribers $108 to $495 a year to find out what he thinks before he puts the information on the Web for all the world to see.

His background is as a freelance fashion writer and celebrity interviewer, not as an investment expert. However, last year Chelekis began writing about mining companies and other speculative Canadian stocks, specializing in those traded on the Vancouver Stock Exchange. He is now widely quoted in the Canadian press and on financial news services.

In fact, his following has grown so large that a thumbs-down can be enough to send a stock into a tailspin, occasionally even generating death threats from shareholders.

Although he considers himself a journalist, Chelekis makes many joumalists cringe by accepting thousands of dollars in "research and promotional fees" from companies he covers and trading in some of the stocks he writes about.

Chelekis says he does nothing wrong and that Canadian journalists are jealous because he scoops them on big stories. One of those journalists, a reporter for the Vancouver Sun, is suing him for libel. So far, however, no government agency has made any move to censure Chelekis.

Indeed, there is little regulation in this electronic marketplace: Anyone can publish on the Web, and users who forget that do so at their peril. But of course, conflicts of interest, scams and misinformation am not the exclusive province of the online investment world.

"There is much more of the wheeling and dealing of penny stocks, load funds that underperform, et al., over telephones and in financial offices than in the online world," said Tom Gardner, one of the "Motley Fools" running a popular investment area of the America Online service.

From Gardner's perspective, one of the best things about the online world is that it gives investors a chance to talk with one another and get their questions answered by experts. He said the Motley Fool's forum recorded 600,000 visitors last month and has been growing 30 percent a month.

The forum offers posting areas on about 1,000 U.S. stocks, 20 analysts who answer questions, a "Fool's School," investment games, a real-money portfolio and live online "meetings" every night.

"What becomes so apparent, is just how isolated investors have been from one another," Gardner said. "With tens of thousands of investors around the table here in the digital world, our potential - if we can keep focused on fundamental analysis - is awfully high."

Investors who like statistics and performance rankings also can find plenty of those online, both through subscription information services and out on the Web. Getting started takes a computer, a modem and a telephone line.

Two of the best sites on the Web are Gait Technologies Inc.'s NETworth site and Mutual Funds Magazine's online site, both of which have searchable data bases and reams of information.

"Online investors know more and know it sooner than investors using traditional information resources," said Norman G. Fosback, publisher of Mutual Funds Magazine in Fort Lauderdale.

In many instances, online investors can go directly to the source to get information about investments. Many mutual fund companies and public companies have sites on the Web, and Securities and Exchange Commission filings are available for many companies. However, the quality of company sites is spotty, and many are more consumer-oriented than investor-oriented. Gerlach, the Web publisher, says investors shouldn't be intimidated by the online world.

"You have to have a pioneering spirit about it," he said. "You're going into the unknown, and there are all sorts of things out there, good and bad. If it sounds too good to be true, it probably is. But there are lots of sites and people who are very helpful. Information is what it's all about."

Rex Henderson
Tampa Tribune, July 22, 1995

"Hot" is a word that comes up often in connection with George Chelekis, a brash Clearwater publisher of the online Hot Stocks Review.

Chelekis, a former New York City publicist, has a habit of hitting hot buttons.

He did it earlier this year with his Hot Stocks Review home page, which has emerged as the most prominent investment advisory service on the Internet. Chelekis writes breathless, gossipy stock advice on the "bizarrely speculative" Canadian mining stocks, and thinly traded over-the-counter stocks in the United States.

He is now an overnight stock analyst, who vows to become an expert. "I still have a long way to go," he said.

His training in the field consists of a minor in economics in college and a career as an award-winning journalist.

Indeed, he won a 1993 award from the Florida Magazine Association for a column in Business magazine, which he coauthored with three others. He also gained a few months of national fame by authoring "The Official Government Auction Guide" on bargains at government surplus sales.

He is the subject of chatter on the Internet investment groups where he is sometimes praised, and sometimes denounced as a "scam."

He laughs about the denunciation, and its source.

"Oh, Luc. You know Luc and I talk every day. We're buddies," Chelekis said.

He struck a mother lode of publicity when Business Week featured Chelekis in its June 5 cover story about Online Investing. The story helped make the Hot Stocks Review home page the most active site on Cybergate, a Florida Internet server, officials at Cybergate said. He is still the third most active site on that server.

Chelekis has emerged as a sort of frontiersman on the Internet and in the tiny speculative stocks he writes about. On the Internet, there are few rules, and fewer securities regulators.

Chelekis, who is alternately defensive, garrulous, profane and entertaining, thrives there.

"I like the anarchy of the Internet. The alert, interactiveness - like "Shoot me, man.' When somebody flames me, I sit there and say, "Wow, I was sloppy. I better watch out.' " (For the uninitiated, flaming is harsh criticism.)

In that environment, "if you're not loud, you're not heard," he said.

Chelekis is the child of a Greek family from New York City and he was trained in journalism reading the city's tabloids. He is plenty loud, he admits.

Few things quiet him. One is an association with the Church of Scientology in Clearwater. He once admitted to being an adherent, and is listed as a $100,000-plus donor in Impact Magazine, the magazine of the International Association of Scientologists.

Now, he said only that, "I have no relationship with the Church of Scientology. I am not saying anything at all other than that."

Chelekis gets flamed regularly, on and off the Internet. His columns were barred briefly from the Bloomberg News Service.

His name has popped up often in lawsuits. In New York, Pennsylvania and Clearwater he has been sued for debts of a telemarketing firm he once owned, Rex Publishing Co. About $933,000 in judgments were entered. Chelekis says he sold his stock in the company and therefore was not an owner when the lawsuits were filed.

In Vancouver, Canada, he was sued for libel by the owner of the Vancouver Sun and a reporter for the newspaper. Chelekis accused the reporter and a source of being "manipulated by, or conspiring with, professional short sellers to decimate a stock's price" on the volatile Vancouver Stock Exchange.

Chelekis says that the reporter, David Baines, had given up his objectivity and had become an advocate for throttling the wildly speculative exchange, where Chelekis was promoting stocks. The reporter won't comment.

And 10 days ago in California, Chelekis' name appeared in a fraud and racketeering lawsuit. The lawsuit claims he helped promote a couple of Colorado gambling stocks, Nona Morelli II and a partly owned subsidiary, NuOasis Gaming.

The chief executive of those companies, Fred Luke, was recently charged with fraud in Colorado for failing to disclose other lawsuits while applying for a gaming license. The charges have been dismissed.

Chelekis was not named as a defendant in the California lawsuit, but the text of the suit claims he was paid to promote the stock.

"These people are hallucinating," said Chelekis after reviewing a stock market chart. The chart, he points out, showed nearly flat prices and low volume in February, when he was writing the articles on Nona Morelli and NuOasis. "Some stock promoter I am."

"And now, I'm a racketeer. Hey, I'm a racketeer," he said, jesting.

Besides, he swears he was not paid.

"I, George Chelekis, have never been paid by Nona Morelli," he said, right hand held aloft.

He once retracted a column, written Feb. 15, which claimed that NuOasis was negotiating a joint venture with an Indian tribe to open a casino in Orlando.

It turns out that neither of the two Indian tribes in Florida own land near Orlando.

"I regret writing anything at all with NuOasis Gaming, but it has nothing to do with the present," he said. "I just said this is a financial gossip column. Caveat Emptor," he added.

He said he was not paid by Nona Morelli, but he admits he has been paid by scores of companies he writes about.

In the rough and tumble frontier of penny stocks and Internet financial advice, that's common practice, he said. It's a practice that has raised questions about his credibility since he admitted to it in the Business Week article.

He launched Hot Stocks Review a year ago as an insert to Bull & Bear Financial Report, published in Longwood.

He told readers nothing about his methods initially, but has been gradually increasing the level of disclosure, partly at the urging of Bull & Bear publisher David Robinson.

What sets him apart from others, Chelekis says, is that he admits to the practice openly.

He takes straight cash payments. The number has been gradually decreasing, he said. Other penny stock writers are far worse and less open about it, he alleges. They engage in trading from brokerage accounts held outside the country, and take positions in options on the stocks they promote, he said.

The criticism, he said, comes mainly from rivals who resent his success on the Internet.

Does it matter that he gets paid?

"On one extreme, so what," remarked Mark Hulbert, a financial newsletter analyst and columnist for Forbes magazine. "I look at real world performance of the newsletter ... Could you make money following this guy?

"Having said that, everyone has to raise an eyebrow about the compensation arrangement, because it raises the question of conflict of interest," Hulbert said.

"Few things quiet [Chelekis]. One is an association with the Church of Scientology in Clearwater. He once admitted to being an adherent, and is listed as a $100,000-plus donor in Impact Magazine, the magazine of the International Association of Scientologists. Now, he said only that, 'I have no relationship with the Church of Scientology. I am not saying anything at all other than that.' "

"His name has popped up often in lawsuits. In New York, Pennsylvania and Clearwater he has been sued for debts of a telemarketing firm he once owned, Rex Publishing Co. About $933,000 in judgments were entered. Chelekis says he sold his stock in the company and therefore was not an owner when the lawsuits were filed."

"According to the SEC's complaint, in 1995 Chelekis made at least $l.l-million from more than 150 companies and got 275,000 shares of stock from 10 issues in return for recommending their stocks. In six cases, he made false statements about small, thinly traded companies, suggesting that they were about to get big contracts, had hot new products, or were about to be taken over."

"In four of the six incidents, the SEC said that Chelekis' statements were so wild that the companies themselves - which had paid him to promote their shares - still issued news releases denying his claims."

New York Times
Published in the St. Petersburg Times Feb. 26, 1997

The author of several popular intemet newsletters on investing settled federal charges Tuesday that he had misled investors by making false claims about several companies and failing to disclose that he was getting paid to promote more than 150 stocks.

George Chelekis, who publishes the Hot Stocks newsletters in Tampa, agreed to pay $163,000 to settle a civil case brought by the Securities and Exchange Commission in U.S. District Court in Washington. Without admitting or denying the commission's charges, Chelekis agreed to a permanent injunction barring him from violating securities laws.

The case is the first in which a stock promoter has disgorged not only payments he received for promoting stocks, but also money he got from newsletter subscribers under false pretenses, said Paul Gerlach, associate director for enforcement of the SEC.

"He generated substantial fees from subscribers thinking they were getting independent analysis, when what they were really getting was undisclosed, paid-for advertising," Gerlach said of Chelekis.

The action against Chelekis comes two months after the SEC sued the proprietors of another electronic newsletter, SGA Goldstar, for taking secret payments to promote stocks. In that case, the newsretter writers received stock in the companies they promoted, stock that they sold when the shares started to rise, the SEC contended. An attorney for SGA Goidstar has said that the writers' investments were adequately disclosed to readers.

Some of the Chelekis newsletters, which include Hot Stocks Review and Hot Stocks Whispers, did contain boilerplate disclosure about his activities, Gerlach said. But such a disclaimer is inadequate, he said, adding that investors should know "the amount and source of money, exactly how much was paid and who paid it."

It is unclear whether Chelekis will continue to publish Hot Stocks; his attorney, Michael E. Schoeman of Schoeman Marsh & Updike, declined to comment on that question or on the settlement. When asked why Chelekis settled the suit, Schoeman said "he wanted to put this behind him."

A World Wide Web site operated by Chelekis, www.hot-stocks.com, appeared to be operating Tuesday afternoon.

According to the SEC's complaint, in 1995 Chelekis made at least $l.l-million from more than 150 companies and got 275,000 shares of stock from 10 issues in return for recommending their stocks. In six cases, he made false statements about small, thinly traded companies, suggesting that they were about to get big contracts, had hot new products, or were about to be taken over.

In four of the six incidents, the SEC said that Chelekis' statements were so wild that the companies themselves - which had paid him to promote their shares - still issued news releases denying his claims. These disavowals appear to have made it easy for the regulators to bring their case against Chelekis.

"We aren't saying that for the other 144 companies he was accurate," Gerlach said. "These are six demonstrable instances of making false statements."

Chelekis turned to the Web because it offers a fast and cheap way to reach people.

"You can E-mail 100,000 people for 25 cents," Chelekis said in 1995. He charges electronic subscribers $108 to $495 a year to find out what he thinks before he puts the information on the Web for all the world to see.

His background is as a freelance fashion writer and celebrity interviewer, not as an investment expert. In 1994, Chelekis began writing about mining companies and other speculative Canadian stocks, specializing in those traded on the Vancouver Stock Exchange. He has been widely quoted in the Canadian press and on financial news services.

Information from Times files and Bloomberg Business News was used in this report.