SEC suspends trading for 35 spamming companies

Washington (DC) - The Securities and Exchange Commission (SEC) has suspended trading of stocks for 35 companies, citing the fact that they sent out or commissioned others to send unsolicited bulk e-mails.

The initiative, code named "Operation Spamalot", goes after companies behind spam campaigns because they often contain misleading statements that artificially inflate the stock price.

For example, Apparel Manufacturing Associates (APPM) was behind a self-promoting bulk e-mail that read, "Huge news expected out on APPM, get in before the wire, We’re taking it all the way to $1.00 !" This caused a rush on the stock and more than doubled its price per share, from 19 cents to 45 cents. After the promised news never arose, it dropped even lower than it was originally, to 10 cents.

Companies included in the mass suspension, which the SEC says is the biggest of its kind for spam offenses, are DC Brands International, Red Truck Entertainment, Wataire Industries, and Sports-stuff.com.

The suspensions were effective at the opening bell today, at 9:30 AM ET, and will last for 10 business days, ending at 11:59 PM ET on March 21.