The US SEC (Securities and Exchange Commission) has suspended trading for 35 companies that allegedly benefited from spam email campaigns to hype their stocks.
Yesterday's SEC action is the most suspensions of companies with stock hyped in spam, the Commission said. The suspensions, which will last for 10 business days, are part of a SEC effort called Operation Spamalot aimed at protecting investors from potentially fraudulent spam campaigns hyping small-company stock, the SEC said. The emails 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 email 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."