You have to wonder if any of the social media haters especially those with short postions are familiar with this SEC guidance.
SEC.gov | Updated Investor Alert: Social Media and Investing -- Stock Rumors
SEC Enforcement Action Involving Social Media and Market Manipulation
The SEC has charged individuals for committing securities fraud through the use of social media.
In a recent Enforcement action,
SEC v. Craig, the SEC accused an individual of manipulating the share prices of two publicly traded companies by tweeting false and misleading information. The defendant allegedly tweeted rumors that federal law enforcement was investigating a technology company for fraud, and that a biopharmaceutical company had tainted drug trial results and a federal government agency seized its papers. The SEC asserted that these deceptive tweets were made from Twitter accounts mimicking established securities research firms. The hoaxes allegedly caused investors to lose more than $1.5 million.
In
SEC v. McKeown and Ryan, the SEC obtained
judgments against a Canadian couple who used their website (PennyStockChaser), Facebook, and Twitter to pump up the stock of
microcap companies, and then profited by selling shares of those companies. The couple allegedly received millions of shares of these companies as compensation and sold the shares around the time that their website predicted the stock price would massively increase (a practice known as “scalping”). The SEC’s complaint alleged that the couple did not fully disclose the compensation they received for touting the stocks. The court ordered the couple and their companies to pay more than $3.7 million in disgorgement for profits gained as a result of the alleged conduct, and
ordered the couple to pay $300,000 in civil penalties.
SEC Definition of Manipulation
SEC.gov | Manipulation
Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock. They include: spreading false or misleading information about a company; improperly limiting the number of publicly-available shares; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. Those who engage in manipulation are subject to various civil and criminal sanctions.
Can anyone think of any investment sites spreading false and misleading information?
