FTC, Adult Site Settle on CAN-SPAM Violations

WASHINGTON - The Federal Trade Commission has approved a settlement with ATM Global Systems Inc. and its principals, Mark Richman and Nathaniel Seidman, regarding alleged violations of the CAN-SPAM Act.


According to the FTC and the Department of Justice, the defendants used affiliates who sent spam intended to drive users to adult websites, including SexyFriendSearch.com, a dating service.


The defendants were accused of violating federal law by sending spam with false or misleading header information, failing to include an opt-out mechanism and failing to include a valid postal address. The alleged violations have taken place since at least January 2006, the FTC said.


The settlement bars future violations of the CAN-SPAM Act, requires the defendants to establish an effective program for monitoring affiliates, and imposes a $75,000 civil penalty, the FTC said.


"Based on the defendants' inability to pay, a judgment of $442,900 -  the amount the defendants made from the illegal spam - will be suspended upon payment of a $75,000 civil penalty," the FTC said. "Should the court find that the defendants misrepresented their financial status, the entire amount will be due."


The FTC approved the settlement by a 5-0 vote on May 2.


The judgment was filed in the U.S. District Court for the Northern District of Illinois.