A HONG Kong businessman, who sent tens of millions of unwanted e-mails to manipulate stock prices, pleaded guilty this week.

How Wai John Hui, 50, a resident of Hong Kong and Vancouver, was one of 11 people indicted early this year for trying to artificially pump up Chinese stock prices. He is the third to confess.

Hui was also the chief executive officer of China World Trade, which had its stock price pumped up as a result of the scam.

The case is part of a larger Internet fraud, where the alleged mastermind Alan Ralsky, from Michigan in the United States, tried to pump up prices of Chinese companies' stocks that he and his co-conspirators held.

The charges, from between 2004 and 2006, include conspiracy, mail fraud, electronic mail fraud and wire fraud.

Prosecutors also say that ringleader Ralsky - possibly one of the top five spammers in the world - made about US$3 million in the summer of 2005 alone by sending out spam messages.

For his part in the case, Hui faces between 63 and 78 months in jail, according to the plea agreement with prosecutors.

Hui and the other two who earlier confessed will testify against Ralsky and the others.

The case is significant and widely watched because there have been comparatively few real-world cases and precedents legally for what happens in the online world, still seen as beyond the frontier.

A senior technology consultant at Internet security firm Sophos, Mr Graham Cluley, said in a statement that 'without punishment, cybercriminals may be tempted to re-visit old techniques and this will cause more trouble for computer users'.

Since the alleged conspiracy, the amount of what he calls 'pump-and-dump stock manipulation spam' has dropped significantly, he said, but 'it is still encouraging to see authorities pursue cases like this and bring perpetrators to justice'.