SEC Comes Down On Fake “Bullish” Articles

By on May 3, 2017

May 3, 2017

The SEC has filed fraud charges against more than two dozen entities for their part in schemes to promote stocks by publishing paid articles disguised as objective reports written by analysts. In its press release announcing the actions, the SEC said that it had already reached settlements that included disgorgement and penalties ranging from $2,200 to nearly $3 million with 17 out of 27 entities charged, “based on frequency and severity of their actions.” Litigation was continuing against 10 others. Deceptive measures, the SEC said, “were often used to hide the true sources of the articles from investors. For example, one writer wrote under his own name as well as at least nine pseudonyms, including a persona he invented who claimed to be ‘an analyst and fund manager with almost 20 years of investment experience.’ One of the stock promotion firms went so far as to have some writers it hired sign non-disclosure agreements specifically preventing them from disclosing compensation they received.”

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