SEC takes action against stock spammers

On March 8 the US Securities and Exchange Commission annonunced a 10-day trading suspension for securities of 35 companies quoted on the Pink Sheets quotation service. The suspensions aims at protecting the public from fraudulent stock price manipulation by stock spammers.

All of these stocks have been advertised to millions of email users via pam, usually sent from “botnet” zombie computers. Buyers are tempted into purchasing penny stock already held by the spammers or their paying customers and as soon as prices start inflate due to rising demand, the criminals sell at a profit, leaving the new buyers to take a loss when the stock price deflates back to pre-spam levels or below.

This practise is widely known as “pump and dump”. The SEC welcomes information about such stock scams at email address 35suspensions(at)sec(dot)gov.

We have already reported 14 other companies to them whose stock has been advertised via “pump and dump” spams during the course of the past week.

2 thoughts on “SEC takes action against stock spammers

  1. Now, if only the SEC would crack down on internet bulletin boards, chat rooms, and newsgroups with equal vigor, we’d be getting somewhere.

    This is where the con man “action” is going, heavily, these days. All the old scams–the 80-40-20, historical bonds, fast-track stock tips, insider dumps, etc.–plus many new ones.

  2. Pingback: Joe Wein’s blog » Blog Archive » Anti-Fraud sites under attack

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