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One hundred and eighty-five investors — many of them elderly — were fleeced out of $7.2 million in a scheme that federal securities regulators say involved bogus investments in a phony off-shore bank hyped over the Internet.

The scheme to tout Royal Meridian International Bank was one of the biggest Ponzi schemes yet discovered on the Web, the Securities and Exchange Commission alleged last month.

The case is just the latest in a string of more than 30 securities cyberfraud cases brought by the SEC over the past three years. And those cases — which involve at least tens of millions of dollars in illegal gains — just scratch the surface of the dangerous side of investing through the Web. "There are a lot of bad things going on over the Internet," said John Stark, the SEC's new top cybercop. "We're in the greatest bull market in history at the same time as we're in the greatest information revolution in history."

That combination has made stock market investing easier and cheaper than ever before, and helped to level the playing field between professional investors and individuals who can now access information with the click of a button.

But it's also meant that investment scams can move quicker and hit more people than they could in the older schemes involving legions of cold-calling brokers pumping stocks by phone.

While using new technology, the cyberscams are similar to the classic "pump-and-dump" frauds and Ponzi schemes that have been perpetrated offline for decades.

In a pump-and-dump, typically a stock promoter furiously hypes a small company and — after fresh investors have been bought in and sent prices soaring — sells at a big profit, leaving naive investors holding the bag when the stock inevitably collapses.

In a Ponzi, or pyramid, scheme, a promoter promises big returns then uses new money coming in to pay off existing investors. The scheme ultimately disintegrates under its own weight.

Consider Systems of Excellence, the SEC's poster child case for prosecuting cyberspace securities fraud.

Beginning in 1996, regulators charged that the company, a video teleconferencer known by its eye-catching ticker symbol SEXI, and Internet publisher SGA Goldstar Research, were at the center of a scheme that involved hyping the stock on the Internet.

As a result, SEXI Chairman Charles Huttoe netted $12 million in illegal profits — and the government successfully prosecuted him for securities fraud. Last year, Huttoe and SGA Goldstar Research publisher Theodore Melcher went to prison.

The proliferation of Internet investment schemes like SEXI has been so rapid that regulators are only now beginning to catch up.

Since the SEC began informally policing the Internet three years ago, the number of complaints has rocketed to 120 a day, Stark said. Last week, as the SEC moved to beef up efforts to root out cyberfraud, Stark, 34, a native New Yorker and long-time SEC attorney, became the first director of the agency's new Office of Internet Enforcement.

The National Association of Securities Dealers, Wall Street's self-policing organization, also is beefing up surveillance of the Net. 
But even with the help of regulators at the Federal Trade Commission, FBI and elsewhere, there's no way to keep tabs on every stock scheme in cyberspace.

"We'll never be able to police it 100%," said Elisse Walter, chief operating officer of NASD Regulation.