The SEC has stepped up trading suspensions of stocks when it believes company information is “inaccurate or unreliable”. The SEC points to internet promotions and social media posts that claim certain products can “prevent, detect, or cure coronavirus” such claim according to the SEC are meant to increase the value of the company. These activities are commonly referred to as “pump and dump” schemes. To date, the SEC has suspended trading for at least twenty-two (22) companies.
SEC FILES CHARGES FOR COVID-19 RELATED FRAUD
On April 28, 20202 the SEC filed charges against both Praxsyn Corp. and its CEO for allegedly issuing false and misleading press releases “claiming the company was able to acquire and supply large quantities of N95 or similar face masks to protect wearers from the COVID-19 virus.”
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