SEC hits L.A. firm in spam probe
Federal regulators froze trading Friday in the stocks of a Los Angeles company and two others as they widened their effort to combat Internet stock fraud.
Shares of Peopleline Telecom Inc., which trades in the over-the-counter market, will be suspended through April 29.
The Securities and Exchange Commission, which ordered the trading halt, said it had questions about “the adequacy and accuracy of press releases concerning the company’s operations and concerning stock promoting activity.”
Peopleline executives could not be reached for comment.
The company says it offers telephone and fax service in the Vancouver, Canada, area, where it was previously based. However, Peopleline’s most recent news release was issued from Los Angeles, where the SEC says it is now based.
The trading suspensions are an extension of the agency’s Operation Spamalot campaign, which began last month to crack down on the spam stock touts that litter millions of e-mail inboxes. The agency froze trading in 35 stocks early last month.
The spam messages typically promise big gains and urge investors to buy shares.
Regulators say the spam campaigns appear to be an electronic twist on the decades-old “pump and dump” scam, in which manipulators load up on a small stock, tout it aggressively and sell it at a profit after investors take the bait.
The other two companies whose stocks were frozen are Amerossi EC Inc. of Wyoming and Irwin Resources Inc. of Vancouver.
