| April 10
April 10 The U.S. Securities and Exchange
Commission on Monday announced a crackdown against alleged stock
promotion schemes in which writers were secretly paid to post
hundreds of bullish articles about public companies on financial
Twenty-seven individuals and entities, including a Hollywood
actress, were charged with misleading investors into believing
they were reading "independent, unbiased analyses" on websites
such as Seeking Alpha, Benzinga and Wall Street Cheat Sheet.
According to the SEC, many writers used pseudonyms such as
Equity Options Guru, The Swiss Trader, Trading Maven and
Wonderful Wizard to hype stocks.
The regulator said had it identified more than 450 problem
articles, of which more than 250 falsely said the writers were
not being paid.
"This is different from the fraud cases that you usually see
us bring," Stephanie Avakian, acting director of the SEC
enforcement division, said on the conference call.
"Here, we allege that the fraud was in presenting the
analysis as impartial," she said. "It was bought and paid for."
Seventeen defendants including Galena Biopharma Inc
, ImmunoCellular Therapeutics Ltd and Lion
Biotechnologies Inc agreed to pay more than $4.8
million, including fines and restitution, to settle, and to
refrain from further wrongdoing.
Not all defendants were required to make payments, and
Galena, ImmunoCellular and Lion did not admit wrongdoing. None
of the websites was charged.
The SEC filed lawsuits against the other 10 defendants in
Manhattan federal court.
These defendants include Lidingo Holdings LLC, run by
Kamilla Bjorlin, 46, an actress from Encino, California who
performs under the name Milla Bjorn; and CSIR Group LLC, a New
York firm overseen by Christine Petraglia, 49.
It is unclear whether those defendants have hired lawyers. A
lawyer representing Lidingo and Bjorlin in separate litigation
had no immediate comment. CSIR and Petraglia did not immediately
respond to requests for comment.
The SEC also issued an alert warning investors that articles
on investment research websites may not be objective and
independent, and that they should never invest based solely on
information published there.
Mike Taylor, a Seeking Alpha managing editor, said in an
email that website's policies "act as a strong deterrent against
potential promotions," including documenting "all authors'
claims to not having been compensated by third parties."
(Reporting by Jonathan Stempel in New York; Editing by Richard