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.

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.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?