The Securities and Exchange Commission issued a statement that it has suspended trading in SpectraScience (OTC:SCIE) that was allegedly touted on social media. SpectraScience is delinquent in its reporting and has not filed reports since 2017. The SEC states that the phone number on the company’s website is non-functioning as well. The SEC described the company as inactive.
Before shares were suspended, SpectraScience had a market cap of around $492,000 with a 52-week trading range of 0 to 0.0022, according to Yahoo Finance.
The SEC’ said that certain social media accounts may be engaged in a coordinated attempt to artificially influence the share price of SpectraScience. The order said that the share price and trading volume of SpectraScience has increased even though there was no publicly available news from the company.
“This is a reminder that investors should exercise tremendous caution when investing based on social media or a sudden surge of enthusiasm for a particular security, especially where that interest does not appear tied to any news about the company or industry,” said Melissa Hodgman, Acting Director of the SEC’s Division of Enforcement.
Recent activity in certain securities that have been driven by discussions on social media platforms like Reddit has caught the attention of both regulators and policymakers. The US House of Representatives and US Senate are expected to hold hearings on the phenomenon and will most likely include representatives from the SEC.
Under the federal securities laws, the SEC can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.