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sec-closes-barn-door-horses-unavailable-for

Posted by: admin 15 years, 10 months ago

Security Focus has a breif on the SEC's action to suspend trading in pump & dump stocks. The full SEC press release is here. From the press release:

On Friday, Dec. 15, 2006, shares in Apparel Manufacturing Associates, Inc. (APPM) closed at $.06, with a trading volume of 3,500 shares. After a weekend spam campaign distributed emails proclaiming, "Huge news expected out on APPM, get in before the wire, We're taking it all the way to $1.00," trading volume on Monday, Dec. 18, 2006, hit 484,568 shares with the price spiking to over 19 cents a share. Two days later the price climbed to $.45. By Dec. 27, 2006, the price was back down to $.10 on trading volume of 65,350 shares.
Maybe I'm missing something here, but don't you think the pump and dumpers sold their stocks before the end of the year? I mean it's not like they were waiting to get the income into the next tax year.

"When spam clogs our mailboxes, it's annoying. When it rips off investors, it's illegal and destructive," said SEC Chairman Christopher Cox. "Today's trading suspensions, and actions that will follow, should send a clear message to spammers: the SEC will hold you accountable."
By hurting the people who still own the stock. Now I have no idea why anyone would by a penny stock like this, except to gamble online legally. And that is the point, it is legal. Heck, if you are a long-time holder of APPM, then your stock is up from $.06 to $.10. You're a happy investor.

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