It seems that these freewheeling fraudsters are having big trouble with the new pro active regulators. Where once they accepted filings without question, they now ask questions and request documents, no longer do mere claims suffice to obtain clearance to market shares.
This is largely the result of the computer age. Most people today don't realize how things worked before computers. A regulator/researcher had to fill out a form for the documents they desired, then turn that over to an archivist. The archivist had to go down into those cavernous vaults and pull the records, often making several trips to different floors, it could take weeks to fill a request. Worse there was always such a backlog of requests for documents and never enough staff to fill them in anything like a reasonable period of time.
Enter the computer age and with a few simple keystrokes one man or woman can pull dozens of records in seconds, no need for highly paid, specially trained archivists. So now the regulators have real muscle to put behind the rules. They've even got software that watches the trades for activity that falls within certain parameters, parameters that raise red flags so they can take a much closer look. What the regulators are able to do today would have cost billions of dollars "yesterday", thus they can do what could not be done before.
Of course, this is creating a "New World Order" for investors, who now have additional reasons to be wary of penny stocks, since any of these companies can trip a red flag and trigger regulatory action that might instantly wipe out ones entire investment in seconds, with no time to respond at all.
How this will play out, I can't begin to figure, but until the regulators clean out the penny markets, it's going to be very hard for the pinks and OTC markets to raise cash via toxic lenders, since they are the ones who usually fund scams. While these toxic lender are harder to catch, since it's no crime to lend, the regulators are hot on the trail so these toxic lenders may soon find their heads on the old chopping block too.
