It has launched complaints against 44 companies and individuals which it says are promoting shares on the web - while not disclosing that they're being paid by the companies they are talking up.

Nineteen involved touting shares in Internet share newsletters, while others involved spam, or junk e-mail, bulletin boards and websites.

The SEC says that the companies concerned received undisclosed payments of $6.2m, and 1.8m shares or stock options to promote small company stocks on the Internet.

Richard Walker, the SEC's head of enforcement, said:
"Today's sweep demonstrates the SEC's commitment to cleaning up the Internet by aggressively prosecuting securities violations occurring in Cyberspace."

Cyber-enforcement

The first US case involving Internet fraud was in 1995 and involved a scheme to sell unregistered securities by a telephone lottery over the web.

In July, the SEC established a cyber-enforcement division of 125 people who surf the net looking for fraudulent financial dealings.

The SEC's online Enforcement Complaints Centre receives more than 120 complaints a day about internet securities fraud.

And the SEC warned other investors to be vigilant in an alert published on its website today:

"Never, ever make an investment based solely on what you read in an online newsletter or Internet bulletin board, especially if that investment involves a small, thinly-traded company that isn't well-known."

Stocks on the internet

Interest in using the Internet both to find information about stocks and trade on-line is increasing fast.

Stock trading on the Internet is booming, challenging conventional stockbrokers. There are now an estimated 4 million private traders with Internet accounts in the USA.