The Securities and Exchange Commission announced on Monday that it had suspended trading in 128 inactive penny stock companies to put them out of reach of fraudsters.

By suspending trading in dormant shell companies on the over-the-counter marketplace, the SEC is trying to ensure they don’t become a source for “pump-and-dump” schemes.

The SEC said its Operation Shell-Expel, started in 2012, has prevented fraudsters from “having the opportunity to manipulate these thinly-traded stocks by pumping the companies’ stock value through false and misleading promotional campaigns and then dumping the stocks after investors buy in.”

Once a stock has been suspended from trading, the SEC says, it cannot be relisted unless the company provides updated financial information to prove it’s actually operational.  “It’s extremely rare for a company to fulfill this requirement, and the trading suspensions essentially render the shells worthless and useless to scam artists,” the SEC said in a statement.

Since it began in 2012, Operation Shell-Expel has resulted in trading suspensions of more than 800 microcap stocks, which comprises more than 8% of the OTC market.

“Operation Shell-Expel continues to be an efficient way to combat microcap fraud by denying fraudsters the empty nests they need to hatch their schemes,” Andrew J. Ceresney, Director of the SEC Enforcement Division, stated. “We are getting increasingly aggressive and adept at ridding the microcap marketplace of dormant shells within a year of the companies becoming inactive.”

Monday’s trading suspension identified dormant shell companies in 24 states and Canada.

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