Former Columnist Settles Fraud Suit

Thom Calandra, a former columnist for online financial news publisher MarketWatch.com, has agreed to pay more than $540,000 to settle regulators’ civil fraud charges, the Securities and Exchange Commission said Monday.

Calandra was accused of using his newsletter to pump up the prices of certain stocks and then profiting by secretly selling them, the SEC said.

The veteran business journalist neither admitted nor denied wrongdoing in the settlement with the SEC, under which he is paying a $125,000 civil fine and is returning $416,109.58 in allegedly illegal trading profits plus interest.

In a lawsuit filed in federal court in San Francisco, the SEC alleged that Calandra reaped the illegal profits through a practice known as “scalping” -- buying shares of small, thinly traded companies, writing highly favorable profiles recommending the companies and then selling his shares when the stock price had been driven up by his promotion. From March to December 2003, Calandra secretly followed this “buy-write-sell” pattern for 23 stocks that he covered in his newsletter, the Calandra Report, the SEC said.

Calandra also failed to tell his readers that he had received compensation, in the form of heavily discounted shares, from a stock promoter associated with two mining companies that Calandra had favorably profiled in his newsletter, according to the agency.

Calandra was among MarketWatch’s founding employees, becoming the website’s editor-in-chief in 1997. He resigned a year ago as chief commentator for MarketWatch after the SEC began an informal inquiry into his stock trades.