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.
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.
Hey guys just wanted to post this interesting article from one of the posters of another stock I own, interesting read.Any of you see this? I got it from another board:
Saturday, July 02, 2011 7:28:40 PM
Securus Law Group, P.A. Public Company News June 26, 2011
Information in this newsletter is of a general nature and is not intended to answer any individual's legal questions. Do not rely on information presented herein to
address your individual legal concerns or state laws. Your receipt of information from this newsletter does not create an attorney-client relationship and the legal
privileges inherent therein. If you have a legal question, you should consult an attorney experienced in that area of the law. Moreover, the hiring of an attorney
is an important decision that should not be based solely upon advertisements. Before you hire an attorney, you should request information about the attorney's
qualifications and experiences. Phone (888) 914-4144 email: Craig@Securuslawgroup.com 1 | Page
Securus News: Penson Crack Down on Stock Prices Accepted Cause Companies Upheaval
Penson Implements a $.10 Rule for
Stock Clearing; Evaporates Public
Company Stock Movements and Sales
By Craig A. Huffman, Esquire,
Managing Partner,
Securus Law Group, P.A.
Craig@Securuslawgroup.com
The Ten Cent Problem
Companies whose stock trades below $.10 per
share may quickly find themselves in an illiquid
position, unable to raise capital, for
shareholders to sell shares, or in any way
deposit shares through many brokerages.
Penson Financial Services, Inc. (PSFI) made a
significant policy change that public companies
should be, or may already be aware of in
regards to the pricing of securities for deposit
through their clearing system. PSFI is the third
largest clearing firm in the United States
(Pershing and Fidelity are #1 and #2
respectively). PSFI’s clearing actions of stocks
being deposited to brokerages has a significant
effect on penny stock companies. Their actions
just became devastating to micro priced
stocks. On June 1, 2011, Penson released a
new policy whereby they will be restricting
deposits of shares of any kind, whether they
are made by physical certificate, DWAC, DRS
(Direct Registration System) or ACAT. Penson
will no longer accept deposits of equity
securities traded on the Pink Sheet or OTC
Bulletin Board markets priced below $0.10.
The amount of companies affected could be
staggering. This also affects a great deal of the
284 brokerage firms that clear through Penson,
but not all since some will be able to clear
depending upon status of accounts with
Penson. Penson reasoned that somehow
stocks at these low prices were more suspect
to fraudulent activity than higher priced stocks.
Penson related their reasoning as:
“Also, the regulatory community has recently
become more focused on the deposits of
physical certificates, particularly those that
trade on the Pink Sheets or OTC Bulletin
Board. The securities industry has experienced
a significant spike in fraudulent transactions
related to reduced valuations or non-existent or
fraudulent transfer agent services for sub-
penny securities. In addition, the potential for
the use of these types of securities for money
laundering or investor fraud are also of serious
concern. As a result, the regulators have
increased their scrutiny of transactions in these
types of securities.”
Interestingly, Penson does not name any of the
supposed “Regulators” who have these
concerns. None the less, Companies below, or
even near this price point now find themselves
at ultimate risk. Having a public trading market
that many of their shareholders can not utilize.
They can not sell or even deposit their
legitimate shares of companies they invested
in. While they can try to “broker shop” the
solution very well is at the Company level.
The Dreaded R Word Solution
While no one wants to contemplate being
forced into a reverse division of their
outstanding shares, the actions of the market,
and in this case the actions of a clearing firm,
can force this solution on a company. Reverse
divisions (splits) should be done when there
are strategic reasons to do so. The actions like
Penson took as to stock prices just made that
decision a lot easier for companies to make.
Expansion of your business operation on a
national level is a good reason. There are
others reasons and movements of some of
your subsidiary businesses or new business
relations that I am sure exist, would be
adequate and solid reasons to declare a
reverse.
A stock reverse is a function of state law. In
some states (Delaware for instance) it takes a
shareholder approval which could necessitate
an expensive and untimely shareholder
meeting. For these companies control of the
share voting power is therefore essential.
While in other States it is a matter of board
resolution (Florida, Nevada). Articles of
incorporation or bylaws also have to allow for
reverse divisions. There are numerous matters
that have to be completed during this process.
The process should take 30 to 45 days on the
outside to complete all matters. The most
important factors are a law firm who works
through the list of to dos and a clearing agent
with a good relationship and responsiveness.
FINRA is responsible for the action of the
shares being reflected on the market to show
the reverse. They are also in charge of
approval of all of the paperwork which they
issue for this, and for the giving of a new stock
symbol as applicable. Working closely with
FINRA is essential by the transfer agent and to
make sure that all documents going to them
are correctly done, and supplied in a timely
fashion.
The numerous items that have to be completed
include: 1) getting a new Cusip for the new
post-reverse shares 2) having the transfer
agent involved to do the transfer agent
notification form, and other documents to
FINRA, 3) having a cover letter completed with
a complete corporations history 4) having the
transfer agent make sure there are sufficient
stock available, 5) supplying FINRA with the
issuer form, along with notarized copies of the
corporations standing documents from the
State, notarized articles of incorporation from
the State, notarized resolution by the board of
directors for the reverse, and notarized
shareholder approval document if required.
The matter must be announced by a press
release and/or an 8-k, which would be positive
in message stating why the strategic reason
was made for the reverse. In this instance, it is
to allow shareholders to trade the stock. And
just how many stocks really should be below
$.10 per share anyway. The timing for
completion should be within 30 days. Under
FINRA rules you have to give them at least ten
days notice before execution. The execution
date will actually be dictated by FINRA when
they choose to effect it. Usually they only give
one day’s notice, usually at about 2-3:00 EST
that the reverse will be effective the next day at
the start of trading, so you should have a
canned press release ready to issue at a
moment’s notice the afternoon you get the
word on the effective date for the next day’s
trading.
“Those who don't know history are destined to repeat it.”
Edmund Burke (British Statesman and Philosopher0, 1729-1797
"Those that do know history can choose to repeat it."
frankie_fillet (Slag for the man} 2011
Verde Media Group (VMGI) Stock Trading Info:
VMGI Stock Quote VMGI Level 2 VMGI Stock Charts VMGI News
VMGI Stock Trades VMGI Historical VMGI Financial VMGI Financial
Public Reply | Private Reply | Keep | Last Read Post New Msg Previous | Next
Follows Follow Verde Media Group (VMGI) Board Keyboard Shortcuts Report TOS Violation
© 2011 InvestorsHub.Com, Inc.
Hey guys just wanted to give you guys some interesting read I just read from one of my other stocks.
Any of you see this? I got it from another board:
Saturday, July 02, 2011 7:28:40 PM
Securus Law Group, P.A. Public Company News June 26, 2011
Information in this newsletter is of a general nature and is not intended to answer any individual's legal questions. Do not rely on information presented herein to
address your individual legal concerns or state laws. Your receipt of information from this newsletter does not create an attorney-client relationship and the legal
privileges inherent therein. If you have a legal question, you should consult an attorney experienced in that area of the law. Moreover, the hiring of an attorney
is an important decision that should not be based solely upon advertisements. Before you hire an attorney, you should request information about the attorney's
qualifications and experiences. Phone (888) 914-4144 email: Craig@Securuslawgroup.com 1 | Page
Securus News: Penson Crack Down on Stock Prices Accepted Cause Companies Upheaval
Penson Implements a $.10 Rule for
Stock Clearing; Evaporates Public
Company Stock Movements and Sales
By Craig A. Huffman, Esquire,
Managing Partner,
Securus Law Group, P.A.
Craig@Securuslawgroup.com
The Ten Cent Problem
Companies whose stock trades below $.10 per
share may quickly find themselves in an illiquid
position, unable to raise capital, for
shareholders to sell shares, or in any way
deposit shares through many brokerages.
Penson Financial Services, Inc. (PSFI) made a
significant policy change that public companies
should be, or may already be aware of in
regards to the pricing of securities for deposit
through their clearing system. PSFI is the third
largest clearing firm in the United States
(Pershing and Fidelity are #1 and #2
respectively). PSFI’s clearing actions of stocks
being deposited to brokerages has a significant
effect on penny stock companies. Their actions
just became devastating to micro priced
stocks. On June 1, 2011, Penson released a
new policy whereby they will be restricting
deposits of shares of any kind, whether they
are made by physical certificate, DWAC, DRS
(Direct Registration System) or ACAT. Penson
will no longer accept deposits of equity
securities traded on the Pink Sheet or OTC
Bulletin Board markets priced below $0.10.
The amount of companies affected could be
staggering. This also affects a great deal of the
284 brokerage firms that clear through Penson,
but not all since some will be able to clear
depending upon status of accounts with
Penson. Penson reasoned that somehow
stocks at these low prices were more suspect
to fraudulent activity than higher priced stocks.
Penson related their reasoning as:
“Also, the regulatory community has recently
become more focused on the deposits of
physical certificates, particularly those that
trade on the Pink Sheets or OTC Bulletin
Board. The securities industry has experienced
a significant spike in fraudulent transactions
related to reduced valuations or non-existent or
fraudulent transfer agent services for sub-
penny securities. In addition, the potential for
the use of these types of securities for money
laundering or investor fraud are also of serious
concern. As a result, the regulators have
increased their scrutiny of transactions in these
types of securities.”
Interestingly, Penson does not name any of the
supposed “Regulators” who have these
concerns. None the less, Companies below, or
even near this price point now find themselves
at ultimate risk. Having a public trading market
that many of their shareholders can not utilize.
They can not sell or even deposit their
legitimate shares of companies they invested
in. While they can try to “broker shop” the
solution very well is at the Company level.
The Dreaded R Word Solution
While no one wants to contemplate being
forced into a reverse division of their
outstanding shares, the actions of the market,
and in this case the actions of a clearing firm,
can force this solution on a company. Reverse
divisions (splits) should be done when there
are strategic reasons to do so. The actions like
Penson took as to stock prices just made that
decision a lot easier for companies to make.
Expansion of your business operation on a
national level is a good reason. There are
others reasons and movements of some of
your subsidiary businesses or new business
relations that I am sure exist, would be
adequate and solid reasons to declare a
reverse.
A stock reverse is a function of state law. In
some states (Delaware for instance) it takes a
shareholder approval which could necessitate
an expensive and untimely shareholder
meeting. For these companies control of the
share voting power is therefore essential.
While in other States it is a matter of board
resolution (Florida, Nevada). Articles of
incorporation or bylaws also have to allow for
reverse divisions. There are numerous matters
that have to be completed during this process.
The process should take 30 to 45 days on the
outside to complete all matters. The most
important factors are a law firm who works
through the list of to dos and a clearing agent
with a good relationship and responsiveness.
FINRA is responsible for the action of the
shares being reflected on the market to show
the reverse. They are also in charge of
approval of all of the paperwork which they
issue for this, and for the giving of a new stock
symbol as applicable. Working closely with
FINRA is essential by the transfer agent and to
make sure that all documents going to them
are correctly done, and supplied in a timely
fashion.
The numerous items that have to be completed
include: 1) getting a new Cusip for the new
post-reverse shares 2) having the transfer
agent involved to do the transfer agent
notification form, and other documents to
FINRA, 3) having a cover letter completed with
a complete corporations history 4) having the
transfer agent make sure there are sufficient
stock available, 5) supplying FINRA with the
issuer form, along with notarized copies of the
corporations standing documents from the
State, notarized articles of incorporation from
the State, notarized resolution by the board of
directors for the reverse, and notarized
shareholder approval document if required.
The matter must be announced by a press
release and/or an 8-k, which would be positive
in message stating why the strategic reason
was made for the reverse. In this instance, it is
to allow shareholders to trade the stock. And
just how many stocks really should be below
$.10 per share anyway. The timing for
completion should be within 30 days. Under
FINRA rules you have to give them at least ten
days notice before execution. The execution
date will actually be dictated by FINRA when
they choose to effect it. Usually they only give
one day’s notice, usually at about 2-3:00 EST
that the reverse will be effective the next day at
the start of trading, so you should have a
canned press release ready to issue at a
moment’s notice the afternoon you get the
word on the effective date for the next day’s
trading.
“Those who don't know history are destined to repeat it.”
Edmund Burke (British Statesman and Philosopher0, 1729-1797
"Those that do know history can choose to repeat it."
frankie_fillet (Slag for the man} 2011
Verde Media Group (VMGI) Stock Trading Info:
VMGI Stock Quote VMGI Level 2 VMGI Stock Charts VMGI News
VMGI Stock Trades VMGI Historical VMGI Financial VMGI Financial
Public Reply | Private Reply | Keep | Last Read Post New Msg Previous | Next
Follows Follow Verde Media Group (VMGI) Board Keyboard Shortcuts Report TOS Violation
© 2011 InvestorsHub.Com, Inc.
How you are you doing Neo That is one thing I'm hoping will happen if we longs can hold tight we can see new highs but we have to hold if not it will just plunge back to trips.
You're right as of 2/28/11 as from share holders email stated in PIHN's share count description but who the h@#l knows what the count is know..
Thought of it but who knows, well we'll see what's at the end of the tunnel.
Someones dumping 2's, just great.
Guys I just spoke to scottrade and they were only able to give me the OS which he said was 5.36 billion, I will try to call the direct number to see if i can get the rest.
I don't know but I am not liking it one bit.
Ctad I just tested to place a buy through scottrade and they are accepting it.
Hey what's the deal with posting about me, yes it's true that i hardly post in the HESG forum but I am a long with 10 million shares since 2009 don't compare me with some other posters.
I have Scottrade and it lets me place a buy order.
Sad to say but it has been a MM play for months these SOB's have a strong hold on HESG and on most of the pinks.
Humpty dump dump sat on the wall and had a great fall, gheeeez, what is this the king of dumpage.
Excellent DD JUPITER, HESG shareholders will be glad to have you as another shareholder.
Awesome Glob like always thanks for your assistance and help.
We longs would hope for a similarity of any of the prior RM's that you have just demonstrated.
For some reason or the other most peeps who are hard core speculators in the pink sheets are day dreamers while being hard core gamblers and unfortunately the big boys take advantage of the gambling mind of the gambling fanatics..
Yea but unfortunately I've been through many stocks that CEO's have stated no R/S and bam!! few weeks later they slap you with it so to be slightly trust worthy is out of the question and speculation just doesn't cut it.
It is just mindf boggling to hear these tools day in day out with the R/S BS I just can't get it, rediculous having to mention the R/S issue when your invested. My guess that these peeps where invested once and are trying to get in later.
thanks.
Glob just curious is Kuni in the U.S. or is he in Japan.
And for example let say you have a total of 20mill shares that cost you 10 g's and they do the old famous fu@#@roo R/S of 100 to 1 know you own 2000 shares with an investment of 10g's, ha ha ha ha, your screwed period, know if you want to stay and reinvest know you have to wait for the big D which most likely will come and wait for a low to jump back in with more money out of pocket and hope and pray the stock will once again climb so you can get out even, come on man, that's for fools.
Good post, and remember one thing true longs don't even mention that R/S could benefit shareholders, I just don't know where the heck peeps get that info. from. Shit the last thing a true long would want to see is a R/S and true what you said I have looked into other boards that gotten R/S and no one I mean not a single shareholder ends up winning except new peeps that wait for the pps to fall again at lows. I for one have been through many and have been burned.
Then you enjoy loosing money don't you, listen man I'm not going to argue with your ignorance.
Thank you.
You're talking to a long buddy i've ben in PIHN for almost two years and hardly ever post on these boards so if I was going to pump I would live on these boards, the problem is that you haven't experienced a R/S therefore if you had you then would not mention it.
I rather have the company pump and let the PPs jump to knew highs and then they can do what ever they please. Would you rather lose your investment or have the chance to make money and then get out before the R/S.
Here we go again with the R/S.
That is why some can't place their opinions because they haven't been burned. Once you have your opinions will turn 360 degrees and will be on the defensive side. speculation is always BS that is why from know on my offense is always on the side lines waiting for factual outcomes not jerking on speculation.
If you can look into the stocks that i have invested you can see that 90% have done R/S and most CEO's stated that there would not be R/S's done, that totally makes any investor lose faith in any PINK so I have become totally weary of any PINK, brother it's just hard to put faith when you have gotten burned to many times.
I am long but the truth of the matter is that R/S's have been commented in this board on a constant basis and when you start hearing R/S on boards it is just not good for anyone and definitely not pleasant for newbies who are looking to invest in a pink.
Ken I am surprised to keep hearing the R/S mentioned and having to hear you say it might not be a bad thing is just irrelevant, I don't know how long have you have been in pinks nor do I care but the fact of the matter is there hasn't been any R/S that has been a positive outlook to the longs, NONE! and I keep hearing longs commenting on the BS R/S. Up to date I have experienced many pinks that have done R/S and all have been a failure if who ever does not believe it you damn sure need to do extensive research in other pinks to wake tfu up.
If you or any are longs I can assure you that all you would not be happy with a R/S.
Thanks again Glob, as you well know we are all restless but thanks again for your continuous efforts.
That's what I been wondering all along.
So what you are saying is to listen to all the BS speculators like most on these boards which most pinks are total BS to begin with and speculators like yourself who are waiting for promises are always caught ending up carrying the BS bag. Ha ha ha ha, I'll be glad to get the F out with just even with my investment, again all the speculators of pinks are dreamers/bs dreamers.
Glob I have respected your DD's and comments but it is time to stop the same old BS we hear in every pink.
It's been going on with many pinks the CEO's are stating that there will be no R/S and then they slap everyone with it weeks later.
Well it's what I always say experience sure does count and counts big time.
Where did all the longs go.
I have gotten hit by several R/S and have lost a bundle of money and know this SOB hits us with this last minute new at 4pm stating the R/S sucks big time can't even get out even, like I told Frankie he was right all the time about VMGI.