SEC suspends trading in 35 stocks over spam scam

WASHINGTON - UNITED States stock market regulators suspended trade in 35 small firms on Thursday due to a fraudulent campaign of mass e-mail, or 'spam', that hyped the firms' shares to investors, officials said.

The Securities and Exchange Commission (SEC) said it had acted, issuing its highest number of suspensions ever related to spamming, to protect unsuspecting investors from likely fraud.

'This morning the Securities and Exchange Commission struck a blow for investors and for every American with a computer against one of the worst menaces of the information age,' SEC chairman Christopher Cox told reporters at a news conference.

The suspensions under 'Operation Spamalot' are part of an increased bid by the SEC to aggressively tackle spam e-mail campaigns that tout a company's stock by falsely claiming a major new oil discovery or a new product launch.

Officials said that even SEC staffers had received the widely distributed e-mail, despite spam-blocking software programmes, which they said had netted the perpetrations millions of dollars in ill-gotten gains.

Mr Cox said the SEC was vying to bring those behind the e-mail to account and that the agency was working with foreign regulators as such communications often crossed international borders.

The SEC estimates that some 100 million spam messages touting stocks are e-mailed en masse every week, sometimes triggering dramatic spikes in share prices and trading volumes.

The actions aim to protect investors from potentially fraudulent spam e-mails hyping small stocks. The e-mail seek to dupe investors with phrases like, 'ready to explode', 'ride the bull' and 'fast money', according to the SEC statement.

Some of the 35 small stocks suspended include America Asia Petroleum, Equitable Mining, Koko Petroleum and Biogenerics.

The trading suspensions will last for 10 days. The companies involved are not listed on any US exchange, but are priced by brokers on the Pink Sheets quotation service.

AGENCE FRANCE-PRESSE