SEC hits 23

The US Securities and Exchange Commission announced recently that its fifth Internet sweep had netted 23 companies and individuals on charges of Internet securities fraud. The cases, which involve both publicly-traded and privately-owned companies, involve the alleged “pumping” of market capitalisations by over US$300 million and the investment of US$2.5 million by parties in the US and overseas. The frauds made use, inter alia, of “spam” emails, online newsletters, websites, hyperlinks and bulletin boards. Richard H Walker, SEC director of enforcement, noted that they provide “a sobering reminder for investors that, on the Internet, there is no clearly defined border between reliable and unreliable information.” However, he also observed that “These actions involve a virtual checklist of common securities fraud techniques. Perpetrators lured investors with promises of fast and easy profits in thinly-traded, or even privately-held, development stage companies that operate in ‘hot button’ industries.”