Intelligent Highway Solutions, Inc. (fka IHSI)

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"SEC Eyeing Penny Stock Craze"

SOURCE:
https://www.bloomberg.com/news/articles/2021-02-16/penny-stock-craze-at-boiling-point-with-sec-eyeing-social-media

Markets
Penny Stock Craze at Boiling Point With SEC Eyeing Social Media
By Sarah Ponczek
February 16, 2021, 2:36 PM EST

GameStop mania is off the front page, but the spirit that fed it still rules many corners of the market. Penny stocks are an area where sentiment remains boiling hot, earning the scrutiny of federal regulators.

Way-off-exchange venues, where lightly regulated companies have repeatedly been drawn into social media-fueled trading vortexes, saw more than 1 trillion shares change hands in December for the first time in a decade. It happened again in January. This month, daily volume is tracking 64% above those levels, a pace that could push the monthly total toward 2 trillion.

The mayhem has caught the eye of the Securities and Exchange Commission, which last week suspended trading in SpectraScience Inc. -- a firm that had surged 633% in 2021 to just over two-tenths of a cent before the halt. The SEC’s order noted that while the company hadn’t filed reports in years and its phone number doesn’t work, “social media accounts may be engaged in a coordinated attempt to artificially influence” its share price.

Source: Bloomberg Intelligence

“Regulatory halts in some of these stocks that are traded over-the-counter, which is the case for a lot of these penny stocks, isn’t entirely unusual or unheard of,” said Shawn Cruz, senior market strategist at TD Ameritrade Inc. “The SEC is now looking at that because they’re questioning what’s driving some of the behavior.”

SpectraScience is just one penny stock that vaulted from obscurity to viral sensation this year. In 2021, on any given day, there have been a dozen or more similar stories. Oftentimes, chatter on social media sites like Stocktwits and Twitter and other online chatrooms presages takeoff. It’s happening as retail traders equipped with zero commissions at brokers have swelled to 23% of stock trading volume, up from 20% last year, according to Bloomberg Intelligence.