SEC Eyes Newspaper Circulation Practices
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Federal regulators are examining circulation reporting practices throughout the newspaper industry following a string of scandals at major publishers, several companies said on Wednesday.
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(InfoWorld) - The Securities and Exchange Commission has taken the drastic step of suspending trading in shares of 35 companies whose stocks have frequently been touted in mass spam campaigns. SEC officials said on Feb. 8 that the firms involved -- none of which are household names -- have been the subject of repeated spam efforts meant to drive up trading of their securities and, subsequently, the value of the companies themselves. The trading bans will last for 10 days, after which shares in the involved companies will be unlocked -- unless the SEC's ongoing investigation proves any of the firms were involved in the e-mail schemes. While the ban might seem unfair to the businesses involved, especially if their names and securities were merely selected by scammers looking for penny stocks to inflate in so-called pump-and-dump operations, SEC officials said that in each business's case, there were sufficient questions raised regarding the "adequacy and accuracy" of information being advertised about the companies. Criminals have increasingly begun using spam to drive up interest in cheap stocks over the last several years. Before sending out mass messages about a specific firm, the individuals buy stock in the companies in the expectation that, with their e-mails, they can convince other people to purchase shares. When prices of the shares involved rise, the schemers sell off their own holdings, thus the pump-and-dump moniker. The spam messages, which often feature subject lines such as "Fast Money," have become one of the types of unwanted e-mail most frequently delivered to inboxes over the last year, alongside advertisements for prescription medications. Whenever misleading information is being widely distributed about a firm whose securities are traded, the SEC takes such actions, an agency representative said. "All we can say is that we suspend trading any time we think misinformation about specific securities is being reported," said Helene Glotzer, an SEC spokeswoman. "We're not making a statement that these companies themselves were behind the misstatements, but if the information is out there we feel it is important to let the investing public know; we'll continue our investigation, and if it is appropriate to take action against any of the companies, that is what we will do." The suspensions are part of an SEC initiative known as Operation Spamalot, which was launched specifically to shield investors from spam e-mail "hyping" small company stocks. SEC officials said that anyone who has received such e-mail will recognize the names of the companies who were suspended, as they are among the most frequently cited businesses in securities-related spam campaigns. The messages typically advertise some new product or impending deal that will increase the value of the companies and encourage investors to buy their low-priced securities, which are usually penny stocks. For instance, among the companies whose shares were suspended is Apparel Manufacturing Associates, a Bloomfield, Conn.-based firm that markets itself as a management and development company focused on the fashion arena. The SEC said that on Friday, Dec. 15, 2006, shares in Apparel Manufacturing closed at 6 cents, on a trading volume of 3,500 shares. After a weekend-long spam campaign using e-mails about the company advertising "huge news" that encouraged investors to "get in before the wire," trading volume in the stock rose to 484,568 shares on Monday, Dec. 18, with the price of the stock rising to more than 19 cents a share. The agency said that two days later the price had climbed to 45 cents per share, but one week after, Apparel Manufacturing's share price had fallen to 10 cents on trading volume of 65,350 shares. Calls to the company seeking comment on the stock suspension were not immediately returned. If the SEC investigation finds no link between the companies involved and the spam campaigns, their shares will be released for trading on March 21, 2007. SEC officials noted that the suspensions were all handed out to companies that are not subject to the SEC reporting requirements and whose shares are not listed on any exchange or on the OTC Bulletin Board. This means that brokers posting quotations for the purchase and sale of the securities are not required to conduct due diligence regarding the issuers, according to the agency. The 35 companies whose trading was suspended by the SEC are: Advanced Powerline Technologies, America Asia Petroleum, Amerossi International Group, Apparel Manufacturing Associates, Asgard Holdings, Biogenerics, China Gold, CTR Investments & Consulting, DC Brands International, Equal Trading, Equitable Mining, Espion International, Goldmark Industries, GroFeed, Healtheuniverse, Interlink Global, Investigative Services Agencies, iPackets International, Koko Petroleum, Leatt Corporation, LOM Logistics, Modern Energy, National Healthcare Logistics, Presidents Financial, Red Truck Entertainment, Relay Capital, Rodedawg International Industries, Rouchon Industries, Software Effective Solutions, Solucorp Industries, Sports-stuff.com, UBA Technology, Wataire Industries, WayPoint Biomedical Holdings, and Wineco Productions.
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Federal regulators are planning to sanction three U.S. stock exchanges for allowing trading firms to cheat investors by allegedly failing to fully enforce their rules, according to a newspaper report Friday.
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ST. LOUIS The newspaper publisher Pulitzer Inc. has said that company officials are considering a possible sale of the firm to improve shareholder value.
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Federal prosecutors in New York have issued a subpoena to the New York Times, the city&#39;s biggest daily newspaper, in an investigation of how newspapers measure circulation figures for advertisers.
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(Associated Press) The Securities and Exchange Commission will propose soon a plan to tighten governance at the nation&#39;s stock exchanges to ensure they are serving the public interest, SEC Chairman William Donaldson said Friday.
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Circulation declined at most major US newspapers in the last half year, the latest blow for an industry already rocked by a scandal involving circulation misstatements that has undermined the confidence of investors and advertisers.
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The Bancroft family, controlling shareholders of Dow Jones & Co. Inc. , are set to submit to News Corp. a new set of proposals on how to protect the Wall Street Journal's editorial independence, the Wall Street Journal reported on Monday.
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U.S. stock markets would have to disclose executive pay and provide details of their regulatory programs, under new rules proposed by the Securities and Exchange Commission on Tuesday.
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The Securities and Exchange Commission on Tuesday proposed that stock markets disclose more information about their operations, including executive pay and regulatory programs.
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In an effort to shore up confidence in newspaper circulation reporting, an industry group is moving to tighten controls and hire more auditing staff in the wake of misstatement scandals at four newspapers this year.
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Securities regulators are probing  several brokerage firms dealing with collateralized mortgage  obligations, the Wall Street Journal reported on Friday.
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By Ian Katz, South Florida Sun-Sentinel  Feb. 19--The buzz on Internet message boards started with a simple filing to the Securities and Exchange Commission.
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The Federal Communications Commission is expected to approve Tuesday a proposal by Chairman Kevin Martin that will allow broadcasters in the nation's 20 largest media markets to also own a newspaper Â overturning a 32-year-old rule.
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A couple of hedge funds would like to fix a pair of family-owned newspaper chains.
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A Securities and Exchange Commission official yesterday signaled that the agency may grant foreign companies whose stock trades on U.S. exchanges a brief delay to comply with a controversial accounting reform.
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Securities regulators are reviewing  whether investment banks' trades in shares of companies linked  to M&A deals they were advising were based on coincidence or  inside information, according to The Wall Street Journal on  Monday.