Securities watchdog suspends trading for 15 stocks after 'suspicious social media activity'

The US securities watchdog suspended trading in 15 companies’ stock today, claiming that their prices had been artificially inflated by a calculated social media campaign which exploited the market volatility.

It comes as a cybersecurity company analysis suggested that GameStop and other “meme stocks” may have pumped by bots, or automated accounts, on Twitter, Facebook and YouTube.

Friday’s suspension follows temporary bans of dozens more issuers, many of which may also have been targets of apparent social media attempts to artificially inflate their stock price, the Securities and Exchange Commission (SEC) said.

Melissa Hodgman, Acting Director of the SEC's Division of Enforcement said: "The SEC's recent suspensions of trading in nearly two dozen securities – including 15 today – are one facet of our ongoing efforts to police the market and protect investors.

"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. We also remind investors to exercise caution and do their diligence before investing generally, including in companies promoted on social media."

The suspended issuers included Bebida Beverage Co (BBDA); International Power Group Ltd (IPWG) and Universal Apparel & Textile Company (DKGR).

The SEC can suspend the trading of stocks for ten days and prohibit a broker from selling or buying unless certain conditions are met.

Cyber security company PiiQ on Friday claimed that social media bots have been hyping up GameStop and other "meme stocks" which have become extremely volatile in recent weeks.

There had been speculation that the buzz around GameStop, AMC and Blockbuster may have been the work of a foreign interference campaign. However Reddit chief executive Steve Huffman told American politicians this month that he did not believe bots or fake accounts played "a significant role" in pumping up the stock's price and following an investigation, did not conclude that foreign meddling was a factor.

However PiiQ said it found bots on Twitter, Facebook and YouTube which were posting with keywords including "Hold The Line", "GME" and "GameStop".

The researchers said that it had found thousands of bots pumping Dogecoin, GameStop and others.