``Protecting Investors From Internet Fraud Must Be Top Priority'' Direct Stock Market's CEO Says, Urges Full SEC Budget Funding.

LOS ANGELES--(BUSINESS WIRE)--Sept. 8, 1999--

"Protecting America's investors from Internet stock fraud must be a top priority," Direct Stock Market's Chairman and Chief Executive Officer Clay Womack said today, and urged Congress to fully fund the Securities and Exchange Commission (SEC).

Womack, a nationally-recognized authority on direct public offerings and the use of the Internet for capital formation, pressed for full funding in letters addressed to Sen. Ted Stevens, Senate appropriations committee chairman, and Rep. Bill Young, House appropriations committee chairman. Womack also sent letters to leaders of both the Senate and House sub-committees on commerce, justice, state and the judiciary.

Direct Stock Market (www.dsm.com), is an Internet marketplace for public offerings and private placements for small and emerging companies.

"Your support is vital," Womack wrote committee leaders. "Internet stock fraud is very real, and it is costing America's investors millions of dollars. But these thieves aren't just stealing from individual investors, they're also stealing from this nation's future.

"The millions lost could help fund the new, emerging-growth companies that need capital to expand business, hire employees and buy materials."

In his letter, Womack applauded the work being done by the SEC, noting that the Division of Enforcement has taken significant actions against individuals and companies for allegedly using the Internet to defraud investors and potential investors.

These sweeps included cases alleging fraudulent spams, online newsletters, message board postings and Web sites that unlawfully touted, misrepresented or inadequately disclosed material facts.

To continue fighting the securities thieves who use the Net to manipulate, tout and scheme, Womack wrote, the SEC needs more resources and manpower.

The House Appropriations Committee has approved $324 million for the SEC's 2000 budget -- $37 million less than the $361 million the agency requested -- while the Senate voted $371 million, or $10 million more. Negotiators from both chambers will gather in early September to reach a balance. He urged committee members to provide full funding.

"I hope legislators will move to the Senate side of this issue and provide additional funds," Womack said about his letters to appropriations committee leaders. "But at the very least, Congress should give the SEC what it's asking for."

Womack also praised the enforcement work being done by state securities regulatory bodies.

"Fighting Internet fraud isn't just a national problem," he said, "and state agencies also are to be commended for the work they do."

Womack called on investors around the country to contact Congress and urge members to fully fund the SEC.

"The Internet is rapidly changing the way America invests, bringing a new democracy to our capital markets," he said. "But investors need to get involved, first by being better educated about Internet fraud, and second by contacting their congressional representatives urging support."

About Direct Stock Market

Direct Stock Market Inc., with headquarters in Santa Monica, Calif., is an Internet-based marketplace for both public offerings and private placements. DSM's mission is to be the number one source for emerging-growth-company investment on the Internet.

As of 1999, DSM has facilitated the raising of more than $75 million in equity capital and has listed more than 120 companies on its Web site. dsm.com's online community includes registered investors from all 50 U.S. states, as well as Puerto Rico, Canada, Mexico and many other countries.

Note to Editors: The text of Womack's letters follows: -0- Honorable Chairmen:

I am the Chairman and Chief Executive Officer of Direct Stock Market, Inc., a Santa Monica, Calif.-based company that serves both as an Internet marketplace for public offerings and private placements for small and emerging companies, and as an Internet community for investors looking for early-stage equity opportunities. I am writing you in support of Congress fully funding the Securities and Exchange Commission's budget for the year 2000.

I believe full funding is necessary because of the battle being waged by the SEC against Internet stock fraud. Your support is vital in fighting the criminals who manipulate, tout, scalp and scheme. Internet stock fraud is very real, and it is costing America's investors millions of dollars.

The Internet has become the vehicle for their crimes, because the Net is fast, low cost and gives an electronic veil of anonymity. But these thieves aren't just stealing from individual investors, they are also stealing from this nation's future. The millions lost could help fund the new, emerging-growth companies that need capital to expand business, hire employees and buy materials.

The SEC stands in the gap against these high-tech thieves, and does a commendable job. Its Division of Enforcement has taken significant actions against individuals and companies.

For example, Internet fraud sweeps by the SEC have resulted in several enforcement actions against companies and individuals for allegedly using the Internet to defraud investors and potential investors. These sweeps included cases alleging fraudulent spams, online newsletters, message board postings and websites that unlawfully touted, misrepresented or inadequately disclosed material facts. In some cases, the SEC says it was able to detect bogus investment offerings before perpetrators could make any sales.

I strongly support the work the SEC does, but it's not enough. The SEC needs additional resources if it is to successfully battle this growing cyber problem.

In a May 4 speech, SEC Chairman Arthur Levitt said that "policing this marketplace will require more resources, more manpower and more money." I agree, and urge you to at least provide the full funding - $361 million - that the SEC requests for the year 2000.

The Internet is rapidly changing the way America invests, bringing a new democracy to our capital markets. But the Net also empowers crooks to steal in new ways. That's why we need a tougher, stronger SEC, along with your support giving them the tools and manpower to do the job. Protecting America's investors from Internet stock fraud must be a top priority.