InvestorsHub Logo
Followers 167
Posts 20652
Boards Moderated 1
Alias Born 08/09/2000

Re: None

Wednesday, 06/15/2005 7:40:21 PM

Wednesday, June 15, 2005 7:40:21 PM

Post# of 43
GVRP- Notice how AT protect their customers. Abuse or Protection? Which? You decide!

NOTICE the UNDERLINED part and HOW AT PROTECTs their CUSTOMERs (NOT - IMO) You can SELL and be at RISK but not BUY and NOT BE at RISK. LMAO. Thanks so much AT.

http://www.dailycamera.com/bdc/national_intl_business/article/0,1713,BDC_2464_3809239,00.html

Tiny Gluv could turn into big headache for Wall Street

By Dow Jones/AP
May 27, 2005

NEW YORK — Over-the-counter trades involving millions of shares of a tiny Florida company called Gluv Corp. could soon become a major headache for some securities firms.

The trades involved stock improperly sold into the market by one of Gluv's shareholders last week. Although Gluv's stock currently trades at a fraction of a cent, the stakes are high because securities firms that handled these shares could fail to complete the transactions if they are not unwound by regulators.

Advertisement

If transactions involving improperly released Gluv stock are allowed to stand, investors who sold stock they thought they owned could find themselves short Gluv, having sold shares that they didn't really own. That could result in losses for investors who would have to purchase shares to deliver to their brokers in order to complete the transactions.

Chris Nagy, Managing Director of order routing for Ameritrade Holding Corp., said that as a precaution, the brokerage stopped allowing clients to buy shares of Gluv on Monday. The company continues to allow clients to sell the stock.

Gluv stock trades on the Pink Sheets. The company has recently attempted to restructure its stock ahead of a planned merger with Media Magic Inc. Gluv spun off its assets into a private company, leaving all but a corporate shell for Media Magic to slip into.

According to a press release, Media Magic, based in West Palm Beach, Fla., produces videos and CDs for children.

In order to get rid of existing shareholders, Gluv conducted a 1-for-6.5 million reverse share split on May 12, which reduced the shares outstanding to just 11. It wasn't clear how shareholders with less than 6.5 million shares were compensated.

A week later, Gluv said it would conduct a 3 million-for-1 forward stock split that would bring the shares outstanding to 33 million shares. None of these 33 million shares were supposed to trade before Monday, May 23.

But here's the rub: Apparently one of Gluv's 11 shareholders got his 3 million new shares early and started selling stock that was not supposed to be trading.

In a press release issued Sunday, Gluv warned shareholders that shares had improperly made their way into the marketplace and that investors should "not trade these shares until further notice." The company said it's investigating the matter and that it would cooperate with regulators.

Gluv said it asked the Securities and Exchange Commission to halt the trading of its stock. That has not happened. Instead millions of shares of Gluv continued trading and that could result in some securities firms ending up stuck with nonexistent stock.

"This is not a problem we had anything to do with," said Steven Dreyer, a lawyer who represents Gluv.

Dreyer said that he has seen the dividend information sent by the company to the Nasdaq Stock Market, which has the Pink Sheets under its purview, and that it correctly reflected Gluv's plan to complete a 3 million-for-one split on 11 shares outstanding.

Nasdaq disagrees. "We don't believe that we imputed the information incorrectly," said Jenifer Coragelo with Nasdaq's Market Operation Dividend Department. "We did process what we had correctly," Coragelo said.

Coragelo said an investigation by the SEC and the NASD is ongoing. NASD which, has a majority control in Nasdaq, also serves as its regulator.



Before you criticize a man, walk a mile in his shoes. That way, if he gets angry, he's a mile away and barefoot.

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.