(Associated Press via NewsEdge) The US Securities and Exchange Commission on suspended trading in 35 companies whose shares were touted in email spam campaigns.
The SEC said it took the action to protect investors from fraud, because the accuracy of information in emails about the companies was questionable.
The SEC did not identify who had sent the emails or say whether any of the companies was responsible.
Emails heralded with messages such as 'Ready to Explode,' 'Ride the Bull' and 'Fast Money' clog people's inboxes, an estimated 100 million of them a week, and spark dramatic spikes in trading and stock prices before the spamming stops and investors lose their money, the SEC said.
The suspensions are part of an SEC effort called 'Operation Spamalot,' which began last fall. The suspensions will last for 10 business days, through March 21.
The companies' shares are not traded on stock exchanges. They are listed on the so-called Pink Sheets, an electronic quotation service in which brokers posting quotations to buy or sell stocks are not required to investigate the background of the companies.
The use of spam email to hype stocks is a variation on the classic 'pump and dump' stock scheme, in which the perpetrators get people to buy stocks to inflate their prices and then sell their blocks of shares at a profit. Ordinary investors can suffer heavy losses when the prices tank amid the dumping of stock.
SEC officials said their investigation of the individuals behind the spam schemes continues. Their identities are known to the agency, they said, but they were not made public.
© 2007 The Associated Press
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