The Securities and Exchange Commission has suspended trading in the securities of 15 companies as part of its ongoing battle against “questionable trading” related to social media trading.
The regulator has recently identified nearly two dozen securities targeted for potential attempts to exploit investors through social media platforms. The radical change in trading activity surrounding these securities raised suspicion as there was no fundamental reason for such movements in the markets.
Melissa Hodgman, Acting Director of the SEC’s Division of Enforcement, said: “The SEC’s recent suspensions of trading in nearly two dozen securities – including 15 today – are one facet of our ongoing efforts to police the market and protect investors. We proactively monitor for suspicious trading activity tied to stock promotions on social media, and act quickly to stop that trading when appropriate to safeguard the public interest. We also remind investors to exercise caution and do their diligence before investing generally, including in companies promoted on social media.”
The SEC has decided to suspend the trading of these securities to curb social media attempts to artificially inflate their stock price. The order also states that none of the issuers has filed any information with the SEC or OTC Markets, where the companies’ securities are quoted, for over a year.
The SEC suspended trading in the securities of: Bebida Beverage Co. (BBDA); Blue Sphere Corporation (BLSP); Ehouse Global Inc. (EHOS); Eventure Interactive Inc. (EVTI); Eyes on the Go Inc. (AXCG); Green Energy Enterprises Inc. (GYOG); Helix Wind Corp. (HLXW); International Power Group Ltd. (IPWG); Marani Brands Inc. (MRIB); MediaTechnics Corp. (MEDT); Net Talk.com Inc. (NTLK); Patten Energy Solutions Group Inc. (PTTN); PTA Holdings Inc. (PTAH); Universal Apparel & Textile Company (DKGR); and Wisdom Homes of America Inc. (WOFA).
The SEC also recently issued orders temporarily suspending trading in: Bangi Inc. (BNGI); Sylios Corp. (UNGS); Marathon Group Corp. (PDPR); Affinity Beverage Group Inc. (ABVG); All Grade Mining Inc. (HYII); and SpectraScience Inc. (SCIE). All of which were suspended at least in part due to questions about whether social media accounts have been attempting to artificially increase the companies’ share price.
The SEC has the authority to suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.
‘Meme stocks’ have taken the center stage in capital markets in 2021. The WallStreetBets subreddit was extremely successful in its mission to take down GameStop short-sellers and as a bonus it exposed the issues behind the payment for order flow model, with neo broker Robinhood getting much of the backlash.
The COVID-19 pandemic triggered a mass movement towards stock trading, which in turn has resulted in the current social media trading environment.