Fake Net report man arrested

ONE WEEK after a bogus Internet posting caused the price of a Californian technology company to fluctuate wildly on the stock exchange, federal agents said yesterday they had identified the culprit as a mid- level engineer who they believe sought to manipulate the price of his company's shares.

Gary Dale Hoke, who worked for the North Carolina office of PairGain Technologies, was arrested at home in Raleigh, and charged with securities fraud. He was released on bail of $50,000 (pounds 31,000) after agreeing to appear in federal court in Los Angeles, where the company is based.

The Internet posting was dressed up to look like a news report from Bloomberg, the financial information provider, in which it was said that PairGain had agreed to a takeover bid from an Israeli company, ECI Telecom. PairGain's share price jumped from $8.50 to $11.125 before falling after the hoax was revealed.

It was the second time in less than two weeks that federal agents have tracked an online troublemaker, following the arrest of a New Jersey man believed to be behind the Melissa virus which flooded hundreds of thousands of computers with junk e-mail.

Mr Hoke was not formally accused of profiting from his fake posting.