SEC suspends trading of firms susceptible to stock spam
Friday, October 5, 2007; 12:19 AM
The U.S. Securities and Exchange Commission has suspended the stock trading of three companies that haven't provided adequate information about themselves to the public, making them susceptible to spam-based stock scams, the agency said.
The SEC on Thursday suspended trading for Alliance Transcription Services Inc. (ticker symbol: ATSS), Prime Petroleum Group Inc. (PPGU), and T.W. Christian Inc. (TWCI), all traded on the Pink Sheets over-the-counter stock service. The trading suspensions will last 10 days, the SEC said in a news release.
The companies were formerly known as Strategy X Inc., Pinnacle Development Inc. and Xraymedia Inc., respectively. Each changed its name Aug. 14, and purports to have a new business, the SEC said. The companies are susceptible to spam stock promotions because they have inadequately disclosed their assets, business operations or management, their current financial condition, or financing arrangements involving the issuance of the companies' shares, the SEC said.
The trading suspensions are part of an SEC antispam initiative launched in March that has targeted the profit potential for so-called pump and dump stock scams. Since then, spam-related complaints to the SEC's online complaint center have dropped significantly.
In February, the SEC received nearly 167,000 spam complaints, but in September, it received about 68,000 complaints.
"The SEC is moving aggressively against stock market spam that has been clogging our e-mail inboxes for too long," SEC Chairman Christopher Cox said in a statement. A reported 30 percent drop in financial spam means "fewer investors are getting ripped off," he added.
A Symantec Corp. Internet Security Threat Report, released Sept. 17, credited the SEC effort with the 30 percent drop. The SEC efforts "limited the profitability of this type of spam," Symantec said.
In July, the SEC filed securities fraud charges against two Texas men who allegedly hijacked computers nationwide to send millions of spam e-mails and cheat investors out of more than US$4.6 million. In March, the SEC suspended trading for 35 companies that allegedly benefited from spam e-mail campaigns to hype their stocks.