SEC Suspends Trading Of 35 Companies Touted In Spam Email Campaigns
Wow, the largest suspesion in history of companies that have been the victim of stock spam. The SEC is calling into question whether these firms profited from the pump and dump scams, and whether they may have actually paid for them to occur.
The agency unveiled Operation Spamalot as an example of how the SEC is cracking down on stock spam.
From the release:
The trading suspensions are part of a stepped-up SEC effort - code named "Operation Spamalot" - to protect investors from potentially fraudulent spam email hyping small company stocks with phrases like, "Ready to Explode," "Ride the Bull," and "Fast Money." It's estimated that 100 million of these spam messages are sent every week, triggering dramatic spikes in share price and trading volume before the spamming stops and investors lose their money.
"When spam clogs our mailboxes, it's annoying. When it rips off investors, it's illegal and destructive," said SEC Chairman Christopher Cox. "Today's trading suspensions, and actions that will follow, should send a clear message to spammers: the SEC will hold you accountable."
Horray for the SEC. It is about time they did something about it. There have been a number of companies that have admitted to paying for these so called Pump and Dump scams in the past to inflate earnings, or to bolster company claims to shareholders.
The trading suspensions are from ten busines days. Let's hope they get even tougher with these guys.
Other resources
The SEC has also setup a webpage to discuss trading suspensions and inform the public about them.
SEC Trading Suspensions Website