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PairGain ‘mastermind’ faces huge PairLoss

Hoke's troubles mounts as SEC files damages suit

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Oh boy, is he in trouble. Gary Daile Hoke, the 26-year-old alleged mastermind behind the PairGain share ramp hoax has been slapped by a law suit by the Securities and Exchange Commission. This comes on top of the criminal case against the PairGain engineer, and a threat from Bloomberg to sue for unspecified damages. The SEC is also seeking damages from Hoke for his alleged stock manipulation. This could be the cue to sue for day traders who piled into PairGain on 7 April, following the Internet posting of a story purporting to be from Bloomberg. The bogus article "revealed" PairGain's imminent takeover by ECI Telecom from Israel for $1.35 billion -- twice its market cap at the time. PairGain soared 32 per cent on the day, but turned into a big fat PairLoss when the company and ECI issued statements denying any truth in the story. For someone so clever, the perpetrator is also spectacularly dumb. It was a simple matter for Federal Investigators to trace the story back to its origin, using the unique IP address of the scam merchant. And guess what, the trail led all the way to PairGain's North Carolina factory and to Hoke's PC. All that effort on maximising reward and so little on minimising risk. At least Hoke's still got a job. All reports refer to Hoke in the present tense as a PairGain employee. Presumably of the 'suspended on full pay, innocent until proven guilty or I'll sue you' type of employee. If found guilty, Hoke faces an exemplary prison sentence, bankruptcy, and the loss of his career. At his age, he should be able to pick himself up and start all over again. This young man displays a fine understanding of the psychology of markets and day traders. A job in Wall Street beckons. ®

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