Thomas Anderson, the associate editor of Kiplinger’s Personal Finance who earlier this year wrote about how speculative penny stock companies were using business magazines to pump up their stock prices, now writes about how they’re advertising in newspapers.
Anderson wrote, “Why have companies and promoters chosen now to go glossy with penny stock ad campaigns, and what’s being done about it? The short answer to those two questions seems to be: because they can get away with it, and not much.
“Kiplinger’s Personal Finance magazine has refused to run such ads, but the industry standard is lax. The New York Times, for example, says that if a stock is listed and registered with the Securities and Exchange Commission, it will run an ad promoting it. Says Abbe Serphos, spokeswoman for The New York Times, ‘Since the SEC is the regulatory body that oversees such stocks, we believe that the listing or delisting of these stocks gives us an indication of whether to accept these advertisements.’
“A reason so many prestigious publications accept such ads may be because times are tough in the publishing business. Maria Terrell, an associate director with the International Newspaper Marketing Association, says this is the first time that newspapers have seen an advertising decline in a growing economy. Members are debating whether to run ads from escort services, makers of herbal products to treat erectile dysfunction and penny-stock promoters that they wouldn’t have considered in boom times, she says.”
Read more here.