Thursday, August 04, 2022 6:08:36 PM
Rule 6490 codifies Rule 10b-17 of the Securities Exchange Act of 1934 (“Exchange Act”). The corporate actions in question include name changes, forward stock splits, reverse stock splits, distributions of cash or securities such as dividends, and rights and subscription offerings. Recently, FINRA has begun to use the Rule has as an enforcement tool to deny corporate actions by penny stock issuers accepting capital from known toxic funders. The blacklisted toxic funders have been the subject of recent SEC enforcement actions and Department of Justice Investigations; it is these legal actions that permit FINRA to deny the request from companies that have not themselves been targeted.
FINRA’s refusal to process certain corporate changes for issuers accepting toxic funding will likely cause a review by the Depository Trust Company (“DTC”) of stock issuances made by the companies whose requests are denied, resulting in a global lock or DTC chill. Lather, Rinse, Repeat issuers are not new to the penny stock markets. The behavior is most likely to occur when dormant issuers have been taken over in corporate hijackings. The 2010 amendments to Rule 6490 were in fact prompted by an SEC investigation of, and litigation against, Canadian Irwin Boock and his associates, who hijacked dozens of dormant public shells with the help of the fraudulent transfer agency they created. A common pattern in these issuers is to issue issue millions—sometimes billions—of shares of unregistered and illegally free trading stock until reaching their authorized capital. Once they hit the limit, they seek to enact aggressive reverse splits to reduce their outstanding shares so that they can repeat the scheme.
Recent GAHC News
- Management Discusses Financial Filing of Global Arena Holding Inc., for 10-Q, Third Quarter 2023 • InvestorsHub NewsWire • 01/25/2024 02:19:21 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 01/11/2024 09:12:10 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 09/01/2023 08:53:20 PM
- Form NT 10-Q - Notification of inability to timely file Form 10-Q or 10-QSB • Edgar (US Regulatory) • 08/14/2023 06:29:27 PM
- Global Arena Holding Updates Shareholders on Expanding Business Opportunities • InvestorsHub NewsWire • 05/11/2023 06:47:10 PM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM
Cannabix Technologies to Deliver Breath Logix Alcohol Screening Device to Australia • BLO • Apr 30, 2024 8:53 AM
Hydromer, Inc. Reports Preliminary Unaudited Financial Results for First Quarter 2024 • HYDI • Apr 29, 2024 9:10 AM