SEC stops trading on three stocks engaging in spam
The SEC halted trading on the penny-stock shares of NeoTactix, Graystone Park Enterprises and Younger America, accusing those firms of failing to adequately disclose information to investors, according to an agency news release issued Thursday. No trading can occur until April 4 while the SEC investigates the companies' assets, operations and finances.
The three businesses, listed on the so-called pink sheets, were mentioned in promotional email spam and YouTube video campaigns that tried to convince people to invest in their stocks, according to the SEC.
None of the three companies could be reached for comment on Friday.
In the past, the SEC has gone after companies believed to be involved in pump-and-dump schemes, in which junk mailers buy shares of the stock, send the spam, wait for the prices to rise and then they sell their shares for a quick and substantial profit, often while investors are left holding a sinking ship.
"The SEC's anti-spam efforts have been remarkably successful to date, but we will not be complacent in our pursuit of unscrupulous stock promoters," Linda Chatman Thomsen, director of the SEC's Division of Enforcement, said in the release.
Since the agency launched its Anti-Spam Initiative one year ago, the SEC has suspended trading on 50 companies engaged in questionable stock promotion practices. This is the first time the agency has penalized firms whose stock was touted in videos.