Ebola becomes latest stock scam, U.S. SEC says (updated)
20/11/2014 16:45
(Adds background, attempts to reach the companies, quote from
SEC)
By Sarah N. Lynch
WASHINGTON, Nov 20 (Reuters) - U.S. regulators on Thursday
suspended trading in four small over-the-counter stocks of
companies that they said have been touting the development of
products to prevent or treat the Ebola virus, and warned
investors to beware of similar scams.
The Securities and Exchange Commission said it had suspended
trading in the shares of New York-based Bravo Enterprises Ltd,
California-based Immunotech Laboratories Inc IMMB.PK ,
Canada-based Myriad Interactive Media Inc MYRYE.OB and
Wholehealth Products Inc GWPC.PK , which is also located in
California.
The SEC also issued a warning that "con artists" may be
soliciting investors and claiming to be developing treatments or
medicine to prevent the deadly virus.
Company officials at Bravo Enterprises Ltd, Immunotech
Laboratories Inc and Myriad Interactive Media could not be
immediately reached for comment.
A woman who answered the phone at Wholehealth Products hung
up after saying the company was private.
In 2013, the SEC stepped up its enforcement in microcap
fraud with the creation of a new task force that specializes in
penny and microcap markets.
From time to time, the SEC issues investor alerts,
especially when fraudsters try to lure investors using topics
that feature prominently in the news, such as earthquakes or
hurricanes.
"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.
"Fraudsters are constantly exploiting issues of public
concern to tout a penny stock company supposedly in the business
of addressing the latest crisis."
The SEC has the power to suspend trading in companies for 10
days.
After that, brokers can resume trading the stock, but they
must first make sure certain information about the company is
up-to-date and file a form with regulators to demonstrate that
the proper requirements are met.
Often times, once a microcap company has its shares
suspended, brokerages are reluctant to file that form and resume
trading because of the potential risks involved.
In this case, the SEC said it suspended trading of the four
companies because there was a lack of publicly available
information about their operations.
(Reporting by Sarah N. Lynch; Additional reporting by Ransdell
Pierson in New York; Editing by Bill Trott and Jim Loney)
((sarah.n.lynch@thomsonreuters.com; 202-354-5831;))
Keywords: SEC EBOLA/SCAMS