John Babikian used an e-mail list called AwesomePennyStocks to tout a coal company’s stock while dumping his own shares, the Securities and Exchange Commission said last week in a civil complaint. AwesomePennyStocks’ messages about that firm and 38 others, sent over five years, helped fuel spikes in share prices that boosted the combined value of the stocks by as much as $3 billion, according to data compiled by Bloomberg.
Bulk e-mails have long-since supplanted the boiler rooms of the 1990s as the most effective way to hype shares of little-known companies. The value of a prescription-drug distributor that AwesomePennyStocks promoted in 2012 ballooned by more than $700 million within two months. After the messages stopped, the shares collapsed.
OTC Markets Group Inc., which runs venues on which penny stocks trade, tracks the promoters and marks stocks it deems suspicious with skull-and-crossbones icons on its website, according to Chief Executive Officer Cromwell Coulson. AwesomePennyStocks was “one of the biggest promoters,” he said in a phone interview last year.
Bugatti-Driving 26-Year-Old Tied to Penny-Stock Website - Bloomberg