SEC Imposes Trading Ban on 35 Companies
Regulators of U.S. stock market have put a halt in trading of 35 companies found to be entangled in 'pump and dump' e-mail scams. The Securities and Exchange Commission (SEC) launched Operation Spamalot in early March 2007. With this it aims to crush one of the most dangerous threats of the IT era, said Christopher Cox, chairman of SEC, as Itnews reported on March 12, 2007.
Pump-and-dump spammers steal an estimated $123 million (500 million pounds) per year by offering false investment schemes with promises of large dividends from small firms. SEC suspended trading in companies that repeatedly solicit investors via spam mails without authorization.
Cox remarked that when spam stifles mailboxes it irritates e-mail users. When it slashes investors they do it illegally and cause destruction. He believes the trading suspensions and additional actions will clearly indicate to spammers that the SEC will hold them responsible. Msnbc published this in news on March 9, 2007.
According to Link Chatman Thomsen, director of the SEC's Enforcement Division, anyone who reads e-mails from these companies know them because they have all been part of spam mail scams. The Commission therefore urges people not to decide on investment plans on the basis of anonymous e-mails coming to them. At the same time it promises to track down scammers who target potential investors with misleading information, reported govtech.net on March 9, 2007.
The SEC has frozen trading of these firms for ten days. But if it can't prove one to be involved in pump-and-dump scam, it will lift the ban.
Spammers are distributing the apparently short time "investment advice" mails hoping it would push a stock to shed their own shares to earn profits. The pump-and-dump campaigns are becoming increasingly sophisticated suggesting they can help to make lot of money. The legitimate investors of the fraud companies are left to help themselves with the post effects of the low-priced stocks.
SEC officials claim to have found enough evidence against the 35 firms distributing misinformation to impose the ban on their trading. Some of those firms include America Asia Petroleum, Software Effective Solutions and Advanced Powerline Technologies.
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» SPAMfighter News - 22-03-2007