The White House has pledged to crack down on fraudulent Internet stock trading as the US's top securities regulator warned investors to be on guard against the risks of buying and selling shares on the Web.

President Bill Clinton promised the action this week as part of a package of consumer protection initiatives directed at the financial services industry. He ordered the US Justice Department to step up prosecutions for Internet fraud and pledged to improve training for federal and state prosecutors.

"If we want to seize the Internet's full potential, we have to stay ahead of those who would use this open medium to manipulate stock prices, commit fraud in online auctions or perpetuate any other type of financial scam," he said.

His warning came as Mr Arthur Levitt, the Securities and Exchange Commission chairman, urged online stockbrokers to maintain the highest standards of practice and said the SEC was stepping up its surveillance of their business and advertising practices.

Mr Levitt plans this year to double to 250 the number of SEC Cyberforce attorneys and analysts who cruise the Internet for signs of fraud. He will also ask for an additional $11 million (€9.7 million) funding - described by the SEC as a "significant" increase - for the agency's fraud unit for next year.

Internet stock trading continues to enjoy explosive growth in the US. Figures published on Tuesday by CS First Boston showed that the pace of demand for online trading services jumped 40 per cent in April.

In a speech at the National Press Club in Washington, Mr Levitt said more than seven million Americans now traded online and their trades accounted for 25 per cent of all trades made by individual investors.

He stopped short of proposing new regulations, but said there might be a "need for new approaches to better meet the imperatives of the Internet" at a later time.

He also stressed the need for individual responsibility on the part of investors, some of whom have lost significant sums, due in part to ignorance of trading practices and limited knowledge of the market.

In the next two weeks, Mr Levitt said, the SEC's Enforcement Division would announce a number of cases involving fraudulent Internet practices, including charges of false claims by companies and investment offerings in fictitious companies. To date the SEC has brought 66 such cases.