The Securities and Exchange Commission has taken action against alleged stock promoters and hackers thought to have broken into trading accounts. The SEC had suspended trading on Thursday in the securities of 35 companies, which were allegedly promoted in spam e-mail campaigns. In its official communique SEC has informed that the trading suspensions, the most ever aimed at spammed companies, were well thought-out because of questions regarding the adequacy and accuracy of information about the companies.
The SEC further stated that it had taken the action as part of a crackdown against market manipulators using fraudulent e-mails. The modus operandi of the conspiracy was to send e-mails containing messages with phrases such as ‘Ride the Bull’ and ‘Fast Money’ that enticed investors to buy stock in the firms. However, after causing a spike in the shares, fraudsters would then sell their stock. Eventually, following the brief rush, the value of the artificially inflated stock used to fall that naturally adversely affected investors.
According to Oxford University law professor Jonathan Zittrain, on an average Americans receive at least 100 million spam e-mails inflating stocks each week, and the number continues to rise steadily.
On the other hand, these moves by the SEC have been viewed as it would be ineffective to control the spam. The experts are of the view that while the SEC made a splash by unveiling ‘Operation Spamalot’, it is unlikely to end spam. As a matter of fact despite increased enforcement, warnings and federal laws, spam is not only continuing, but thriving.
