The Securities and Exchange Commission suspended trading this morning in the shares of four companies, including two in Southern California, that sell products related to the recent Ebola outbreak.
The agency said information about the companies was "inadequate" and warned that "scam artists" often use events in the news to lure investors into stocks that turn out to be frauds.
Trading was suspended in shares of Immunotech Laboratories Inc., based in Monrovia, and Wholehealth Products Inc., based in Anaheim, along with Patchogue, N.Y.-based Bravo Enterprises Ltd., and Myriad Interactive Media Inc., based in Toronto.
"We move quickly to protect investors when we see thinly-traded stocks being promoted with questionable information that make them ripe for pump-and-dump schemes," said Elisha Frank, co-chair of the SEC Enforcement Division's Microcap Fraud Task Force.
The SEC can suspend trading in a stock for 10 days if a company fails to file timely financial reports, if the agency suspects the company is releasing questionable financial information, or if the SEC believes its shares are being manipulated in trading.
Efforts to reach the four companies were unsuccessful. The phone number listed on Immunotech's website was not in service. No phone listings were available for Bravo Enterprises or WholeHealth Products. Officials at Myriad Interactive didn't return a phone call.
A recent WholeHealth press release said: "WholeHealth Products Inc. is extremely pleased to announce completion of its Global Distribution Rights for the Real Time PCR Rapid Ebola Test." The release said it would market its "PCR Rapid Ebola Test directly to Africa and South American countries" while it applies for regulatory approvals.