SEC shuts down trading for 35 companies due to spam

The US Securities and Exchange Commission suspends stock trading for 35 companies whose stock was allegedly hyped by spam e-mail.
  • (IDG News Service)
  • — 09 March, 2007 07:57

The U.S. Securities and Exchange Commission (SEC) has suspended trading for 35 companies that allegedly benefited from spam e-mail campaigns to hype their stocks.

The SEC action Thursday is the most suspensions of companies with stock hyped in spam, the SEC said in a news release. The suspensions, which will last for 10 business days, are part of a stepped-up SEC effort called Operation Spamalot aimed at protecting investors from potentially fraudulent spam campaigns hyping small-company stock, the SEC said. The e-mails used phrases such as "ready to explode," "ride the bull" and "fast money."

The 35 companies have been quoted on the Pink Sheets over-the-counter stock service. They are not listed on any exchange or on the OTC Bulletin Board, the SEC said.

The SEC estimated that 100 million such stock-trading e-mail messages are sent each week, often triggering dramatic spikes in share prices and trading volumes before the spamming stops and investors lose their money, the SEC said.

"When spam clogs our mailboxes, it's annoying," SEC Chairman Christopher Cox said in a statement. "When it rips off investors, it's illegal and destructive. Today's trading suspensions, and actions that will follow, should send a clear message to spammers: the SEC will hold you accountable."

The SEC said it continues to investigate the source of the spam.

Among the spam campaigns noted by the SEC:

-- On Dec. 15, shares in Apparel Manufacturing Associates closed at US$0.06, with a trading volume of 3,500 shares. After a weekend spam campaign proclaiming, "Huge news expected out on APPM, get in before the wire, We're taking it all the way to US$1.00," trading volume on Dec. 18, volume hit 484,568 shares with the price spiking to over US$0.19 a share. Two days later the price climbed to US$0.45. By Dec. 27, the price was back down to US$0.10 on trading volume of 65,350 shares.

-- On Dec. 19, trading in Goldmark Industries Inc. closed at US$0.17 on trading volume of 126,286 shares. On Dec. 20, the spam campaign started, with e-mail proclaiming "GDKI IS MAKING EVERYONE BANK!," and setting a five-day price target of US$2. By Dec. 28, spam boasted of a price spike of 152 percent in two days and promised a five-day price target of US$1. That same day, the company's stock closed at US$.35 on a volume of more than 5 million shares. By Jan. 9, the closing share price was back down to US$0.15.

Advanced Powerline Technologies Inc., iPackets International, Software Effective Solutions, Sports-stuff.com and UBA Technology are among the other companies affected by the SEC suspensions.

Secure Computing, a cybersecurity software vendor, praised the SEC for its action. The 35 companies suspended represent some of the most "mass-promoted" companies, the company said.

There are more than 600 stock symbols sold on the Pink Sheets and OTC Bulletin Board exchanges that have been promoted through spam in the past year, the company said in an e-mail.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
Use WhistleOut's technology to compare:
Mobile phone plans & deals
Mobile phone models
Mobile phone carriers
Broadband plans & deals
Broadband providers
Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?