RushNet Inc (RSHN)

[sojourner]

More on the non DTC eligibility issue that could sink all non reporting stocks like RSHN and many other pinkies and wipe them off the OTC sooner than one thinks.

The follow article was culled from the web and edited for clarity.

"Currently, some investors are experiencing considerable difficulties / expenses in trading certain OTC stocks. It is likely this will be a growing problem with all brokerage firms, whether they do their trade clearing in-house or otherwise, as the trade-clearing costs for OTC companies are fast becoming too unbearable for brokerage firms to absorb.

The DTCC's actions are just the beginning of the end of ALL OTC companies that sell unregistered shares. The House of Crooked Cards is just beginning to fall.

Penson's non-DTC eligible stock issues: The DTCC (the clearing house for Penson) is finding some/many of these unregistered shares to be sold under false pretenses and are now determining it is better to simply not clear electronic trades made on companies with unregistered shares in the market. Instead, the trade must be accounted for physically (i.e., by stock certificate) which is where exorbitant costs arise. These actions (physical clearing) save the DTCC from the possibility of clearing questionable shares, thereby avoiding potential legal fallouts.

Other brokerage firms who clear trades are following suit. However, this will pose a major problem for them, as they will find they hold questionable shares and certainly won't want to be forced to cover those questionable shares at a loss if, for any reason, all shares of a particular questionable security were to be called in.

The DTCC is ahead of the of the inevitable and impending 'implosion' of the questionable microcap OTC market. They're eliminating their risk exposure first, before it becomes an 'across the board' dilemma. You won't find the DTCC clearing any questionable shares. When all brokerage firms begin charging clearing costs, watch for the implosion of all non-reporting companies. Non-reporting companies will either be forced to begin reporting, or they'll fold for lack of funds required to become current.

It is entirely possible to buy a DTCC eligible stock today, only to have it delisted tommorrow, thereby incurring exorbitant fees upon exiting. If the trade-clearing issue becomes widespread, as it appears it will, you may find your broker not willing to allow you to sell, i.e., a total loss. Kiss the value of your shares good-bye.

Stocks can be counterfeited just as money can be be counterfeited. We have all heard CEOs say they are not selling new shares despite the daily appearance of dilution. There may very well be truth to this in some instances. While actual counterfeit shares are fairly rare, NSS (naked share shorting) is common and is the same as counterfeiting shares as they increase the float, albeit, artificially.

Since the OTC market is minimally regulated by the SEC, it has become the Wild Wild West of the stock market more than ever before. Investors clamour for SEC oversight, but fact is the SEC is not going to oversee pink sheet stocks anymore than the DEA will oversee/regulate drug trafficking, or the ATF gun-running. In other words, you're on your own. Billions of OTC shares have been sold either as unregistered or as naked shorts, and there is just no way to rectify that. Bottom line: naked shorting, unregistered shares, and counterfeit shares are coming to a head, and the DTC is the first to put their foot down.

Below is the most comprehensive list available of non-DTC eligible symbols, updated 10-18-11. Be aware that this list is continually growing as the DTCC discovers companies that have issued unregistered shares."
http://investorshub.advfn.com/boards/board.aspx?board_id=22531

rshn/apru