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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.