US regulators are engaging in the stock market’s version of whack-a-mole – racing to suspend shares of companies with dubious prospects that have been hyped to the moon on social media.
In a Friday statement, the Securities and Exchange Commission said it temporarily halted trading in 15 companies due to concerns that their stock prices were artificially inflated. One of the companies, a penny stock called Blue Sphere, was recently highlighted in a Bloomberg News story after spiking in value following a barrage of posts on online message boards.
“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,” Melissa Hodgman, acting director of the SEC’s enforcement division, said in a statement.
The SEC crackdown adds to the fallout from the GameStop frenzy, in which an army of day traders banded together to drive long-ignored stocks to the stratosphere. The regulator has routinely sought to remove moribund companies from exchanges because it’s worried about retail investors suffering losses, but that effort has picked up pace amid this year’s wild trading.
In Friday’s action, regulators are venturing further into one of the market’s rowdiest districts, targeting penny stocks driven into price and volume frenzies by incessant social media pumping. Frenetic trading, often in profitless companies, on lightly regulated broker networks is perhaps the most extreme example of speculative excess in the 2021 market, a landscape that has also included the SPAC craze and soaring cryptocurrencies.
In February, an average of 90 billion shares changed hands each day on venues such those operated by OTC Markets Group –often called “over-the-counter” securities or the “pink sheets”. It added up to roughly 1.7 trillion shares this month, data compiled by Bloomberg Intelligence show. In December, the total exceeded 1 trillion for the first time in a decade.
Blue Sphere is one of many stocks that vaulted from obscurity to viral sensation – and on any given day there have been a dozen similar stories. Oftentimes, chatter on social media sites like Stocktwits and Twitter and other online chatrooms presages takeoff. It’s happening as retail traders equipped with zero commissions at brokers have swelled to 23 per cent of stock trading volume, up from 20 per cent last year, according to Bloomberg Intelligence.
A phone call on Friday to Blue Sphere was sent to voicemail.
Two weeks ago the SEC suspended trading in SpectraScience – a firm that had surged 633 per cent in 2021 to just over two-tenths of a cent before the halt.
The SEC’s order noted that while the company hadn’t filed reports in years and its phone number doesn’t work, “social media accounts may be engaged in co-ordinated attempt to artificially influence” its share price.
SpectraScience volume surpassed 3.5 billion shares on a single day in late January as the stock surged 167 per cent.
None of the companies suspended on Friday have filed any information with the SEC for over a year. Under the federal securities laws, the SEC can prohibit trading for 10 days and bar a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.
The stocks that the SEC suspended include Blue Sphere Corporation, Bebida Beverage Company, Ehouse Global, Eventure Interactive, Eyes on the Go, Green Energy Enterprises, Helix Wind Corporation, International Power Group, Marani Brands, MediaTechnics Corporation, Net Talk.com, Patten Energy Solutions Group, PTA Holdings, Universal Apparel & Textime Company and Wisdom Homes of America.
UAE currency: the story behind the money in your pockets
Mohammed bin Zayed Majlis
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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THE SIXTH SENSE
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Director: M. Night Shyamalan
Rating: 5/5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
GAC GS8 Specs
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
MATCH INFO
Serie A
Juventus v Fiorentina, Saturday, 8pm (UAE)
Match is on BeIN Sports
If you go...
Etihad flies daily from Abu Dhabi to Zurich, with fares starting from Dh2,807 return. Frequent high speed trains between Zurich and Vienna make stops at St. Anton.
South Africa v India schedule
Tests: 1st Test Jan 5-9, Cape Town; 2nd Test Jan 13-17, Centurion; 3rd Test Jan 24-28, Johannesburg
ODIs: 1st ODI Feb 1, Durban; 2nd ODI Feb 4, Centurion; 3rd ODI Feb 7, Cape Town; 4th ODI Feb 10, Johannesburg; 5th ODI Feb 13, Port Elizabeth; 6th ODI Feb 16, Centurion
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THE DETAILS
Deadpool 2
Dir: David Leitch
Starring: Ryan Reynolds, Josh Brolin, Justin Dennison, Zazie Beetz
Four stars
Challenge Cup result:
1. UAE 3 faults
2. Ireland 9 faults
3. Brazil 11 faults
4. Spain 15 faults
5. Great Britain 17 faults
6. New Zealand 20 faults
7. Italy 26 faults
Our family matters legal consultant
Name: Hassan Mohsen Elhais
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UAE currency: the story behind the money in your pockets
MATCH INFO
Syria v Australia
2018 World Cup qualifying: Asia fourth round play-off first leg
Venue: Hang Jebat Stadium (Malacca, Malayisa)
Kick-off: Thursday, 4.30pm (UAE)
Watch: beIN Sports HD
* Second leg in Australia scheduled for October 10
The Birkin bag is made by Hermès.
It is named after actress and singer Jane Birkin
Noone from Hermès will go on record to say how much a new Birkin costs, how long one would have to wait to get one, and how many bags are actually made each year.
Specs
Engine: Duel electric motors
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Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
What are the influencer academy modules?
- Mastery of audio-visual content creation.
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
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Ultra processed foods
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- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,
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