SEC launches a series of scam sites

SEC launches a series of scam sites

The Securities and Exchange Commission is operating several phony Web sites as shock therapy for Internet investors who neglect to investigate online stock lures.

The first such site, www.mcwhortle.com, appeared in January along with a press release issued by the fabricated McWhortle Enterprises Inc., claiming that the SEC had preapproved the company’s initial public offering. In reality, SEC does not preapprove IPOs.

The McWhortle site claimed the fictitious company had invented a handheld biohazard detection device. The site solicited investments that it claimed would quadruple in three months. More than 150,000 visitors hit the site in three days, but potential investors were taken to a page that warned, “If you responded to an investment idea like this, you could get scammed!”

“What we’re trying do to is warn investors while their guard is down” so that they will act more prudently in the future, SEC chairman Harvey L. Pitt explained. SEC launched the site with the help of the National Association of Securities Dealers Inc., Federal Trade Commission and North American Securities Administrators Association.

The commission has declined to identify its other, active scam sites.

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