Short-sellers and stock promoters have puzzled for years over who operated one of the largest penny-stock websites. A U.S. lawsuit points to a Bugatti-driving 26-year-old from Montreal.
Bloomberg reports that 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 $3bn, 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 $700m within two months. After the messages stopped, the shares collapsed.
'Compared to the ones I ran into, that’s big', Tom Sporkin, the SEC’s former chief of market intelligence, said of the website after Bloomberg News shared the data with him. 'It’s the biggest one I’ve heard of'.
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