3/09/2007

S.E.C. Moves Against Spam That Pushes Hot Stocks

Apparently I wasn't alone in my frustration over spam that touts loser stocks.

The S.E.C. suspended trading in 35 stocks promoted in recent spam campaigns and said further investigation could lead to arrests.

The scheme works like this: Spammers find a penny stock and send millions of e-mails recommending that people buy the stock. When a fraction of a percent of the recipients buy the stock, the price edges upward. At that moment, the spammers dump their shares at a profit, which forced the price down again. Everyone else is left holding shares worth doo-doo.

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