It seems the biopharma industry isn’ capital t immune to the perils of “ fake news. ”

On Monday, the Securities and Exchange Fee (SEC) revealed charges against 27 individuals and organizations behind alleged stock-promotion schemes.

According to the declaration, certain executives hired third-party communications groups to post bullish articles about their companies, encouraging an artificial enhance in market value. Not only did the authors not reveal they were working for the companies in question, in 250 articles the particular SEC asserts that they deliberately misled readers by proclaiming they had no affiliation.

The blacklist consists of three public companies; ImmunoCellular Therapeutics (IMUC),   CytRx Corporation, and Galena Biopharma. Two former CEOs,   Manish Singh of IMUC and Michael Ahn associated with Galena, were also directly charged, alongside seven share communications firms  and 15 of their employees/writers.

“ Deception takes many forms, ” said Melissa Hodgman, associate director of the SEC’ s Division associated with Enforcement, in the SEC statement. “ Our markets can not operate fairly when there are deliberate efforts to reach potential investors with positive articles about a stock while concealing that the companies paid for those articles. ”

Headquartered in Calabasas, California, ImmunoCellular Therapeutics and Singh were both charged for their market ruse. In an observance letter, the SEC alleges that between September last year and August 2012 (when Singh retired), the company compensated more than $230, 000 to a communications firm called Lidingo Holdings.

“ Lidingo, subsequently, paid writers to publish articles describing IMUC securities upon investment websites SeekingAlpha. com and Benzinga. com. Additionally , Lidingo paid writers to ghost-write articles about IMUC that Lidingo then published on Seeking Alpha’ s i9000 website under Lidingo-selected pseudonyms. None of the over fifty articles disclosed the writers’ or Lidingo’ s payment from IMUC or otherwise suggested that the articles were a part of a paid promotion. ”

IMUC went on to win a $19. 9 million offer from the California Institute for Regenerative Medicine in 2015. As of Monday, when the charges were publicized, the company a new market capitalization of just over $9 million.

Another cease-and-desist went to Los Angeles, California-based  CytRx Corporation.   According  to the SEC letter, CytRx was approached within 2013 by Michael McCarthy, owner of the DreamTeam Team and a number of other entities. CytRx signed on pertaining to social media, marketing, and branding services several months later.

By December, the oncology company was taking into consideration an IPO. The SEC charges that CytRx e-mailed DreamTeam towards the end of the month stating: “ We want one to two articles that are bullish on seeking alpha simply by 12/31. In addition we need a huge blitz in January 2014… ”

The third public company accused associated with market manipulation is Galena BioPharma,   based in Portland, Oregon. It seems the SEC already had this one’ s address. As The Street’ s Adam Feuerstein documented in 2014, the NASDAQ-listed company has already had many strikes. One of the investor websites, Seeking Alpha, took immediate action in 2013, removing five articles written by exactly the same author using various pseudonyms.

The SEC’ s allegations span from January 2012 to Feb 2014, overlapping with the Seeking Alpha controversy. During that period, Galena published over 100 publications, according to the enforcement notice, which all claimed to be independent and objective. These were, in fact , advertisements for the company crafted by Lidingo Holdings and the DreamTeam Group at the request of then-CEO Tag Ahn.

“ On more than forty occasions, the writers affirmatively misrepresented that they are not receiving payment for their articles other than from the website which their articles appeared, ” the letter states. “ … As a consequence of this conduct, Galena and Ahn broken the anti-fraud provisions of the federal securities laws, triggered violations of the antitouting provisions, and engaged in improper “ gun-jumping. ”

With stock options incorporated, Galena paid Lidingo a total of at least $460, 500 in monthly fees and a $20, 000 bonus. DreamTeam received a further $50, 000 for its services.

The SEC’ s Office of Investor Education plus Advocacy released an “ Investor Alert” on the same day time, underscoring the need for analysts to not take investor articles  in face value  — even when they claim to be goal. Among its recommendations, a note to be particularly cautious whenever dealing with micro or nanocap companies.

“ Microcap stocks, some of which are penny stocks and/or nanocap shares, may be particularly susceptible to stock promotion schemes and other kinds of market manipulation. ”

Of those charged, seventeen have agreed to forfeit profits or pay penalties which range from approximately $2, 200 to nearly $3 million, depending on frequency and severity of their actions. Litigation is continuing against the 10 others.

Disclosure: I/we have no positions in any stocks mentioned, with no plans to initiate any positions within the next 72 hrs. For real.

Photo: crazydiva, Getty Images