SEC suspends 15 stocks, citing social media hype

As regulators continue to grapple with how to police social media-driven trading, the U.S. Securities and Exchange Commission (SEC) has suspended trading in 15 companies amid concerns about trading activity and online chatter.

The SEC halted trading in the affected securities (see here for the full list), citing “questions about recent increased activity and volatility in the trading of these issuers, as well as the influence of certain social media accounts on that trading activity.”

The regulator’s order noted that none of the issuers has filed information with the SEC, or the venue where the companies’ securities are quoted (OTC Markets), for over a year.

The suspensions come as part of the SEC’s “continuing effort to respond to potential attempts to exploit investors during the recent market volatility,” the regulator said.

The regulator has previously suspended several other issuers citing concerns that may also have been targets of efforts to artificially inflate their stock prices on social media.

“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,” said Melissa Hodgman, acting director of the SEC’s enforcement division, in a release.

“We also remind investors to exercise caution and do their diligence before investing generally, including in companies promoted on social media,” she added.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.