• January 4, 2005

Businessman Sanford Wallace agreed to stop installing spyware on consumers' computers until a case against him brought by the Federal Trade Commission is resolved. The agreement, reached Dec. 20 and made public on Tuesday, allows Wallace to send pop-up ads to consumers who visit Wallace's Web sites.

The FTC sued Wallace in federal court in New Hampshire in October, claiming that he and two companies owned or controlled by him, Seismic Entertainment Productions, Inc., and Smartbot.Net, Inc., exploited a security flaw in Microsoft's Explorer browser to take over consumers' computers and install spyware that changed users' home pages and served them pop-up ads. After installing the spyware, the companies allegedly marketed anti-spyware programs to consumers, and received a cut of sales.

The FTC charged that the alleged conduct amounted to unfair or deceptive practices. No trial date has been set, said Wallace's lawyer, Ralph Jacobs of Philadelphia.

--Wendy Davis