Under the settlement, Darrel T. Uselton and his uncle Jack E. Uselton will no longer be able to trade penny stocks, and Darrel Uselton will pay more than $2.8 million in disgorgement and prejudgment interest and a $1 million financial penalty, the SEC said. The settlement was entered Wednesday in U.S. District Court for the Southern District of Texas in Houston.

The SEC filed securities fraud charges against the two men in July 2007. The Useltons made more than $4 million in the scheme, the SEC said.

“Spam scams come in all forms,” SEC Chairwoman Mary Schapiro said in a statement. “If an e-mail campaign seeks to corrupt the securities market and defraud investors, we’ll pursue it.”

The SEC investigation was prompted by a spam e-mail an attorney at the commission received in August 2005. The subject line of the e-mail was: “Experts are jumping all over this stock …” One spam message said the sender had "uncovered a diamond here" and encouraged recipients to purchase the stock of the promoted company.