The SEC said that on Friday, Dec. 15, 2006, shares in Apparel Manufacturing closed at 6 cents, on a trading volume of 3,500 shares. After a weekend-long spam campaign using e-mails about the company advertising "huge news" that encouraged investors to "get in before the wire," trading volume in the stock rose to 484,568 shares on Monday, Dec. 18, with the price of the stock rising to more than 19 cents a share.
The agency said that two days later the price had climbed to 45 cents per share, but one week after, Apparel Manufacturing's share price had fallen to 10 cents on trading volume of 65,350 shares.
Calls to the company seeking comment on the stock suspension were not immediately returned.
If the SEC investigation finds no link between the companies involved and the spam campaigns, their shares will be released for trading on March 21, 2007.
SEC officials noted that the suspensions were all handed out to companies that are not subject to the SEC reporting requirements and whose shares are not listed on any exchange or on the OTC Bulletin Board. This means that brokers posting quotations for the purchase and sale of the securities are not required to conduct due diligence regarding the issuers, according to the agency.
The 35 companies whose trading was suspended by the SEC are: Advanced Powerline Technologies, America Asia Petroleum, Amerossi International Group, Apparel Manufacturing Associates, Asgard Holdings, Biogenerics, China Gold, CTR Investments & Consulting, DC Brands International, Equal Trading, Equitable Mining, Espion International, Goldmark Industries, GroFeed, Healtheuniverse, Interlink Global, Investigative Services Agencies, iPackets International, Koko Petroleum, Leatt Corporation, LOM Logistics, Modern Energy, National Healthcare Logistics, Presidents Financial, Red Truck Entertainment, Relay Capital, Rodedawg International Industries, Rouchon Industries, Software Effective Solutions, Solucorp Industries, Sports-stuff.com, UBA Technology, Wataire Industries, WayPoint Biomedical Holdings, and Wineco Productions.