The US Securities and Exchange Commission (SEC) today suspended trading in four companies that claim to be developing products or services in response to the Ebola outbreak, citing a lack of publicly available information about the companies’ operations.
The SEC simultaneously issued an investor alert warning about the potential for fraud in microcap companies purportedly involved in Ebola prevention, testing, or treatment, noting that scam artists often exploit the latest crisis in the news cycle to lure investors into supposedly promising investment opportunities.
The four companies where trading was suspended through to December 4 are:
- Bravo Enterprises Ltd. (OTCMKTS:OGNG)
- Immunotech Laboratories, Inc. (OTCMKTS:IMMB)
- Myriad Interactive Media, Inc.
- Wholehealth Products, Inc. (OTCMKTS:GWPC)
In each of these four cases, questions have arisen concerning the accuracy and adequacy of publicly disseminated information, including information about the relationship between the company’s business prospects and the current Ebola crisis.
Elisha Frank, Co-Chair of the SEC Enforcement Division’s Microcap Fraud Task Force, stated:
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. Fraudsters are constantly exploiting issues of public concern to tout a penny stock company supposedly in the business of addressing the latest crisis.
Under federal securities laws, the SEC can suspend trading in a stock 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.
To see more on the SEC Ebola trading suspension click here.