Barry Hertz, one of the online brokerage industry's more over-the-top self-promoters, could soon be charged with insider trading in shares of his own company, Track Data ( TRAC). The Securities and Exchange Commission last week notified Hertz that its staff is recommending bringing an enforcement action that could result in him being removed as chairman and chief executive of the New York-based financial services company. Track Data disclosed the potential SEC charges after the close of trading Friday. Hertz's lawyers issued a press release asserting that their client has done nothing wrong. A Track Data spokesman declined to comment. The insider trading charges would be the final comeuppance for the 54-year-old Hertz, who at one time had grandiose dreams of turning his sleepy market data company into the next E*Trade ( ET) or Ameritrade ( AMTD). In the late 1990s, Hertz was a familiar face to viewers of CNBC. Advertisements for the company's fledgling MyTrack online brokerage division ran in heavy rotation on the business cable news network. Hertz frequently appeared in those ads as MyTrack's main spokesman. In a gravely voice, he boasted about how easy it was to trade and make money using MyTrack. The commercials ended with Hertz announcing, "You can't make this stuff up." Hertz's other bubble-era publicity stunts included a promise to issue a press release a day, splitting his company's stock when it hit $11 a share, and holding online chats with MyTrack brokerage customers. But Hertz's 15-minutes of fame and Track Data's dot-com glow were short-lived. In April 2000, Hertz got a mega $45 million margin call because of bad trading bets on technology stocks. Worse, Hertz, who at the time owned 72% of Track Data's stock, had pledged more than half of his 45 million shares of company stock as collateral to the brokers he borrowed money from. When the brokerages sold much of that stock to cover Hertz's debt, it crushed Track Data's stock and effectively killed Hertz's plans to sell the company.
Hertz became a laughingstock of the online brokerage business and Track Data faded back into obscurity. That was until last week, when Hertz's trading activities thrust the spotlight back onto himself.