Yes, that's a fascinating piece on the OTC - thanks so much for posting it here. I don't suppose it's a big shock to anyone but it is interesting to see the details regarding money wasted/lost on the OTC.
Every day I hear about the mythical "paid basher" yet no one is able to provide documentation to prove this empty claim. Meanwhile there are promoters on almost every OTC stock.
Research further indicates that the troubling characteristics of OTC stocks are exacerbated as companies are permitted to disclose less (Luft et al., 2001; Luft and Levine, 2004; Litvak, 2009; Jiang et al., 2015; Brüggemann et al., 2016). This latter point is particularly salient because OTC stocks are also frequent targets of market manipulation by fraudsters, who often promote OTC stocks by releasing false or misleading information
And then this on page 11:
...companies quoted on the Pink Sheets (now OTC Markets) have the highest percentage of alleged fraud as measured by litigated cases among exchanges and trading platforms in the United States, Canada, and the United Kingdom. In their sample, the majority of litigation related to companies quoted on the Pink Sheets centers on delinquent filings with regulators, fraudulent disclosures, illegal distribution of securities, and pump-and-dump schemes.21 OTC investor losses due to penny stock fraud were estimated to be $2 billion per year in the 1980s, and $6 billion per year in the late 1990s.
