Speech by SEC Staff:
Remarks at "Operation Spamalot" Press Conference
Mark K. Schonfeld
Director, New York Regional Office
U.S. Securities and Exchange Commission
March 8, 2007
Good morning. Thank you Mr. Chairman and Linda. I am Mark Schonfeld, Director of the SEC's New York Office.
I would like to take a moment to give you some background to today's action. This initiative began just a few months ago with a group of creative SEC staff who wanted to do something to attack the problem of stock spam. Typically we take this action on a single company at a time. Here, the team had the idea of trying to do something on a broader scale. The team reviewed hundreds of spam on dozens of companies and tracked down countless bogus claims in the spam to patents, licenses, acquisitions, mining rights, assets and revenues. The result of this work is the trading suspension of the 35 companies announced today.
Our goal is twofold. First, make a broad sweep of companies that have been the subject of outrageous spam. By interrupting the source of stock for spammers, we take away their ability to profit. Second, heighten awareness by the public of the risk of investing in response to spam. Spam does not work without investors willing to part with their money in response to the spam. Thus far in this investigation we estimate that investor losses on these 35 stocks alone are in the tens of millions of dollars.
As we have said, this investigation is continuing. Now that we have stopped the trading in these stocks, we will focus our attention on the people behind the spam and profiting from it.
In closing, I'd like to recognize the tremendous effort and initiative of the staff that developed the trading suspension and is continuing to work on the investigation: Helene Glotzer, Bruce Karpati, Stephanie Shuler, Adam Grace, Steve Vitulano, Terrence Bohan, John Celio, and Simone Celio. I would also like to thank the other organizations, both here and abroad, for their assistance: the NASD, the Royal Canadian Mounted Police, the British Columbia Securities Commission, and the Ontario Securities Commission. Finally, I would also like to thank Linda and the Chairman for their support on this initiative.