Stock spam leads to trade freeze on 35 firms

seaeagle

Stock spam leads to trade freeze on 35 firms - WebWatch

Quote:

The US Securities and Exchange Commission (SEC) has taken action against alleged stock promoters and hackers thought to have broken into trading accounts.

The SEC yesterday suspended trading in the securities of 35 companies that were heavily promoted in spam email campaigns, it said in a statement. The trading suspensions, the most ever aimed at spammed companies, were ordered because of questions about the adequacy and accuracy of information about the companies, it said.

Earlier in the week it won an emergency court order freezing assets in a Latvian-based bank's trading account that allegedly was used in 'pump-and-dump' manipulation of shares in 15 different companies, the SEC said in a separate statement. (continues)

Stock spam certainly is becoming a real problem. I must get around 50 a day (fortunately my spam filter deletes them on the server before downloading).

There are actually 2 types of beneficiaries to stock spam. First there are the ones who send out the spam as they have previously bought shares & sell when suckers have bought the recommended stock & pushed up the price. The second lot are smart brokers who buy the moment they get a stock spam, and then quickly offload when the share price goes up.

Of course, when people realise it's a scam & start selling, the price goes down & a lot of innocent people lose out as they have left it too late to sell at the inflated price.

It's good to see that the SEC is being proactive about this. Though I can't see the amount of stock spam doing the rounds dropping anytime this year.