Adbot still open after brush with SEC

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The president of Adbot, a Chicago-based startup that auctions ad space on the Web, is undergoing an investigation by the Securities & Exchange Commission. James Frith is scheduled to appear in Chicago's U.S. District Court on Dec. 10, in response to a claim from the SEC that he diverted at least $3.4 million from customer accounts at Chicago Partnership Board, a company owned by Mr. Frith that deals in limited partnerships.

The Chicago Sun-Times reported that the FBI raided Adbot's offices Dec. 3, shutting down the company and seizing computer records.

An AdBot spokeswoman, declined to comment on the report, but said that the Chicago Partnership Board was "involved in an incident" and that Adbot was still operating.

"We have people out in New York right now for the Fall Internet World show, and our brokers are still here, we're still moving along, we're still serving ads," she said.

"We'll definitely have more details [Dec. 10], but Adbot is still operating, we're still doing day-to-day business.

Incidentally, Adbot's phone system wasn't functioning on Dec. 8, but the spokeswoman said that the problem is fixed now.

Copyright December 1997, Crain Communications Inc.

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