Two weeks ago we said that the regulatory crackdown against WallStreetBets had begun when the SEC suspended trading in pennystock Spectra Science (SCIE). Well, today we got the clearest confirmation yet that the SEC will do everything in its power to make sure that are no more Melvin Capitals and will seek to put a resolute end to the reddit bull raids when it announced that it "suspended trading in the securities of 15 companies because of questionable trading and social media activity."
Today's order states that trading is being suspended because of "questions about recent increased activity and volatility in the trading of these issuers, as well as the influence of certain social media accounts on that trading activity." In enforcing the suspension, the SEC referred to federal securities laws, according to which "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."
The order also states that none of the issuers has filed any information with the SEC or OTC Markets, where the companies' securities are quoted, for over a year. As a result, the SEC suspended trading in the securities of:
Bebida Beverage Co. (BBDA); Blue Sphere Corporation (BLSP); Ehouse Global Inc. (EHOS); Eventure Interactive Inc. (EVTI); Eyes on the Go Inc. (AXCG); Green Energy Enterprises Inc. (GYOG); Helix Wind Corp. (HLXW); International Power Group Ltd. (IPWG); Marani Brands Inc. (MRIB); MediaTechnics Corp. (MEDT); Net Talk.com Inc. (NTLK); Patten Energy Solutions Group Inc. (PTTN); PTA Holdings Inc. (PTAH); Universal Apparel & Textile Company (DKGR); and Wisdom Homes of America Inc. (WOFA).
The SEC also recently issued orders temporarily suspending trading in:
Bangi Inc. (BNGI); Sylios Corp. (UNGS); Marathon Group Corp. (PDPR); Affinity Beverage Group Inc. (ABVG); All Grade Mining Inc. (HYII); and SpectraScience Inc. (SCIE).
Each of these orders stated that "the suspensions were due at least in part to questions about whether social media accounts have been attempting to artificially increase the companies' share price."
According to the SEC, "today's action follows the recent suspensions of the securities of numerous other issuers, many of which may also have been targets of apparent social media attempts to artificially inflate their stock price. The SEC continues to review market and trading data to identify other securities where the public interest and the protection of investors require trading suspensions.
While none of this is a surprise, we will recycle our conclusion from two weeks ago when we said that "while the SEC is now scrambling to put the genie in the bottle, the reality is that in a world where infinite Fed liquidity has terminally broken any link between stock prices and underlying facts, news or cash flows, such ramps are going to become an increasingly more frequent occurrence. And sadly since no regulator can admit that we now live in the biggest asset bubble ever, they will continue going after the symptoms - speculative daytraders organizing bull raids which by the way have been around ever since the South Sea Bubble - instead of actually focusing on the underlying cause."