SEC Suspends Trading In 15 Stocks Over Social Media Concerns

Market Trading EssentialsFebruary 27, 2021

1 minute read

The U.S. Securities and Exchange Commission suspended trading in 15 companies on Friday, citing questionable trading and social media activity.

What Happened: In a statement, the SEC said that the suspension is part of the agency’s ongoing effort to prevent attempts to exploit investors amid market volatility spinning around the so-called meme stocks such as GameStop Corp (NYSE: GME).

“Today’s action follows the recent suspensions of the securities of numerous other issuers, many of which may also have been targets of apparent social media attempts to artificially inflate their stock price,” the official release said.

Melissa Hodgman, acting director of the SEC’s Division of Enforcement, said, “We proactively monitor for suspicious trading activity tied to stock promotions on social media and act quickly to stop that trading when appropriate to safeguard the public interest. We also remind investors to exercise caution and do their diligence before investing generally, including in companies promoted on social media.”

Why It Matters: The SEC order states that none of the issuers has filed any information with the SEC or OTC Markets, where the companies’ securities are quoted, for over a year.

Under federal law, the agency can suspend trading in stock only for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.

The stocks that were suspended are: