SEC suspends stock trading of 3 companies over spam

As part of its Anti-Spam Initiative, the Securities and Exchange Commission today announced the temporary suspension of trading in the securities of  Alliance Transcription Services, Prime Petroleum Group, and T.W. Christian saying that they haven't provided adequate and accurate information about themselves to the investing public. 

The trading suspensions fall under the Commission's Anti-Spam Initiative announced earlier this year that cuts the profit potential for stock-touting spam and is credited for a significant worldwide reduction of financial spam. A recent private-sector Internet security report stated that a 30% decrease in stock market spam "was triggered by actions taken by the U.S. Securities and Exchange Commission, which limited the profitability of this type of spam," the SEC said in a statement.  In addition, spam-related complaints to the SEC's Online Complaint Center have been cut in half. 

Today's trading suspensions pertain to the securities of Alliance Transcription Services, Prime Petroleum Group, and T.W. Christian. The companies are renamed successors to Strategy X, Pinnacle Development  and Xraymedia respectively, the SEC said. Each of the companies changed its name on Aug. 14, 2007, is currently quoted under a new ticker symbol, and purports to have a new business. The companies are susceptible to spam stock promotions because they have inadequately disclosed their assets, business operations and/or management, their current financial condition, and/or financing arrangements involving the issuance of the companies' shares, the SEC stated. The trading suspensions will last for 10 business days, commencing today at 9:30 a.m. EDT and terminating at 11:59 p.m. EDT on Oct. 17, 2007. 

The federal securities laws lets the SEC suspend trading in any stock for up to ten trading days when it serves the public interest and will protect investors.  For instance, the SEC may act when public information about a company is not current, accurate, or adequate. The SEC has acted when serious questions arose about a company's assets, operations, or other financial information. 

The success of the SEC's Anti-Spam initiative is described in the Symantec Internet Security Threat Report, a semi-annual analysis and discussion of online threat activity during the previous six-month period. The most recent report was released Sept. 17, 2007.   

Earlier this year the SEC suspended trading for 35 companies that allegedly benefited from spam e-mail campaigns to hype their stocks.  That SEC action was the most suspensions of companies with stock hyped in spam, the SEC said in a news release. The suspensions, are  aimed at protecting investors from potentially fraudulent spam campaigns hyping small-company stock, the SEC said. The e-mails used phrases such as "ready to explode," "ride the bull" and "fast money."  The 35 companies have been quoted on the Pink Sheets over-the-counter stock service. They are not listed on any exchange or on the OTC Bulletin Board, the SEC said.  The SEC estimated that 100 million such stock-trading e-mail messages are sent each week, often triggering dramatic spikes in share prices and trading volumes before the spamming stops and investors lose their money, the SEC said.  

Meanwhile the Federal Trade Commission said earlier this week that the company that crammed more then 15 million PCs full of spyware have agreed to pay $330,000 in fines and be monitored by federal authorities for up to eight years. The fine, however, will increase to over $3.5 million if the court finds that the companies have misrepresented their financial status, the FTC said. The Media Motor program silently activated itself and downloaded “malware” that was intrusive, disruptive, and made it difficult for consumers to use their computers.  

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