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STOCKS ADS POP UP ON REGULATORS SITE
Posted on Fri, May. 12, 2006
STOCKS ADS POP UP ON REGULATORS SITE
Blue chip or red flag on Web?
By DION LEFLER
The Wichita Eagle
Get-rich-quick hype has become so prevalent on the Internet that even state investment regulators aren’t immune.
Kansas Securities Commissioner Chris Biggs ordered the search engine on his state Web site shut down late Wednesday, hours after a reporter informed his office that it was being used to advertise investment sites such as rocketstockpicks.com and HOTSTOCKS.COM.
Biggs said he wasn’t aware that the ads were popping up on his Web site. He said it’s inappropriate for a regulatory agency.
“My first reaction was, ‘You’re kidding me, right?’ ” he said. “There’s no way we should have anything like that going on.”
The problem arose because an employee, who is no longer with the agency, set the Web site up with a free search engine called “Pico Search,” Biggs said.
The engine allowed visitors to search within the site, but it was paid for with outside advertising linked to the subject of the search, Biggs said.
For example, site visitors who typed in “investment” would get state-sanctioned advice on investing, saving and financial planning.
But they also would get advertising links wrapped around the state material. Some ads were for well-known online investment brokerages or Microsoft’s MSN Money service.
But other ads weren’t so blue-chip.
Rocket Stock Picks touted “triple your money stock picks” through the state Web site.
Hotstocks identified itself as “your guide to the market’s hot stocks.”
Fine-print disclosures at those companies’ Web sites show that the site owners are not registered with the federal government to give investment advice. Instead, the sites are basically the online equivalent of infomercials, whose unidentified owners are paid in cash or stock to promote investment in “penny-stock” companies.
Company officials of Hotstocks and Rocket Stock Picks could not be reached for comment.
The toll-free number on Hotstocks’ Web site is a non-working number. Neither site provides online contact opportunity except an offer to sign up for a newsletter.
Biggs said his staff will either find a new search engine with no advertising or the site will go without.
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Blue chip or red flag?
The U.S. Securities and Exchange Commission warns investors to watch out for so-called “pump and dump” schemes, in which companies create an Internet buzz to inflate the price of penny stocks they hold. Insiders then sell while the price is high, which devalues the stock and leaves later investors facing big losses.
For information on protecting yourself if you invest in penny stocks, also called “microcap” stocks, visit the U.S. Securities and Exchange Commission at .htm. |
