Regulators Settle Free Stock Offer Cases
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Regulators have settled cases they brought against four promoters and two Internet companies that offered free stock online while allegedly failing to properly register the shares. The Securities and Exchange Commission announced the settlements Thursday, saying it was responding to a wave of free stock offerings over the Net and related investor complaints.
The stock isn’t really free, the SEC says, because the issuing firms got benefits such as investors’ personal information. In some cases, investors were offered extra shares for soliciting other investors.
In the case of American Space Corp., the SEC said investors were told that the free shares they received would give them interests in a company that would revive moon exploration. In fact, the firm was never incorporated.
Individuals were also accused of offering free unregistered shares of Web Works Marketing.com, WowAuction.com and Kinesis Intl.
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