Grillit Inc (GRLT)

[tdbowieknife]

More news... Mammoth Corporation is a toxic lender.

Toxic Funders are a common manipulative force in penny stocks trading. Hundreds of penny stocks are currently using toxic financing to fund operations and pay for insider expenses. These toxic instruments lead to massive amounts of dilution which is often accompanied by paid promotions (some with disclosed compensation and some without), social media pumps, and misleading/exaggerated/fraudulent press releases and public disclosures by the public Issuers.

The financiers target public Issuers that are rarely able to afford the funding and charge extremely high interest rates, processing fees, and penalties, but that’s the least of their clients’ problems. Upon conversion, the lenders enjoy a discount to market price that may be as high as 60 percent, and much higher in the event of default by the issuer. As the funder converts portions of the note and sells the resulting stock into the market in a series of tranches, the stock’s price plummets. That is why these kinds of instruments are called “death spiral convertibles.” Eventually, the dilution caused by the conversions may force the issuer to reverse split the company’s stock or even drive the company into bankruptcy.

Toxic funders have wreaked havoc with OTC companies for decades, but they’ve proved difficult for the SEC to rein in. In the past three years or so, however, the SEC has begun to pursue a new theory of these kinds of cases, invoking the funders’ failure to register as dealers. The SEC defines a dealer as “any person engaged in the business of buying and selling securities for his own account, through a broker or otherwise.” Individuals who buy and sell securities for themselves are usually considered to be “traders,” and are excepted from the dealer definition. What distinguishes a dealer from a trader is that the dealer “buys and sells as part of a regular business,” while a trader does not.

The bottom line is that toxic funders (i) don’t register as dealers, (ii) commit fraud by not making disclosures that they are not registered, (iii) wreak great harm on investors - (After all who buys the shares the funders dump?) and (iv) put thousands of businesses (including legitimate ones) out of business and/or force them into bankruptcy.

A handful of penny stock law firms have been involved in facilitating the sale of billions of shares of stock by the unregistered dealers, participating in both the preparation of the convertible notes and related agreements and arranging for other lawyers to provide legal opinions to facilitate the public sale of the shares.

This forum will be used to keep a list of some of the most active toxic funders, the attorneys they use (when the information is available), and any SEC action taken against the toxic funders. Unfortunately, because many of the most common toxic funders purchase Notes from over 100 Issuers and not all Issuers disclose the names of the lenders they use, it would be an impossible task to track all the Issuers involved.

https://investorshub.advfn.com/Toxic-Funders-38356/

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Buyer Beware






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