The SEC gets a bad rap. This is because they richly deserve it. For years they have concentrated on petty frauds at the expense of actually uncovering massive, systemically dangerous shenanigans, even when led directly to them. However, it would be rude to call them irredeemable. They do, after all, provide very entertaining copy on occasion:
The Securities and Exchange Commission has charged eight participants in a penny stock manipulation ring that allegedly pumped the market prices of at least four stocks and generated more than $6.2 million in illicit profits when they dumped shares on the market.
The SEC alleges that Pawel Dynkowski, who resided in Newark, Del., carried out the market manipulation schemes with others he met through a penny stock web site InvestorsHub.com, which is operated by Matthew Brown of Aliso Viejo, Calif.
We have to admit, we were somewhat bored reading these materials, until some details emerged. To wit:
The SEC alleges that Dynkowski personally saw to it that the manipulative trading was coordinated with misleading press releases from the company, and in some instances he wrote the press releases for Asia Global himself. According to the SEC's complaint, Dynkowski instructed Brown on Aug. 24, 2006, to have Asia Global issue a press release hyping the company's second quarter 2006 financial results and to "make it sound ENORMOUS." On September 1, Asia Global issued a press release claiming that its profits for July 2006 were 745 percent greater than its profits for July 2005.
Furthermore, according to the SEC's complaint, Asia Global issued a press release on Feb. 6, 2007, claiming that its subsidiary had just received a license to produce 104 episodes of "Who Wants to Be a Millionaire" in China.
We don't know about the rest of you, but we sleep better at night knowing the SEC people are on the wall somewhere. Locked and loaded.
SEC Charges Eight Participants in Penny Stock Manipulation Ring [SEC.gov]