SEC cracks down on fake news designed to pump stock prices
The Securities and Exchange Commission announced Monday a crackdown against alleged stock promotion schemes where writers are secretly paid to post hundreds of bullish articles about public companies on financial websites.
Jonathan Stempel of Reuters writes, “Twenty-seven individuals and entities, including a Hollywood actress, were charged with misleading investors into believing they were reading ‘independent, unbiased analyses’ on websites such as Seeking Alpha, Benzinga and Wall Street Cheat Sheet.
“According to the SEC, many writers used pseudonyms such as Equity Options Guru, The Swiss Trader, Trading Maven and Wonderful Wizard to hype stocks.
“‘This is different from the fraud cases that you usually see us bring,’ Stephanie Avakian, acting director of the SEC enforcement division, said on the conference call.
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