Good Vibrations Shoes Inc (GVSI)

[surfkast]

The 15c2-11 issue can be more complex than one realizes. One must know that there are Red Flag Issues that a MM may deem questionable including that WNFT is a shell.

Shell corporation’s acquisition of private company. A shell corporation is characterized by no business operations and little or no assets. In a fraud scheme, a reporting company with a large number of shares controlled by one person or a small number of persons often merges with a non-reporting company that has some business operations. The new public company is then used as the vehicle for “pump and dump” and other fraudulent schemes. Broker-dealers placing quotes for these issuers’ securities should be aware of the potential for abuse. Offerings under Rule 504 of Regulation D where one or more of the following factors are present:

Another possibility is the following.

Concentration of ownership of the majority of outstanding, freely tradable stock. Concentration of ownership of freely tradable securities is a prominent feature of microcap fraud cases. When one person or group controls the flow of freely tradable securities, they can more easily manipulate stock price, compared to when the securities are widely held. In a “pump and dump” scheme, retail interest is stimulated, and the price of the securities is manipulated upward. Often, other broker-dealers that are not intentionally participating in improper activities publish quotations in response to an escalating demand for the security. The promoters of these companies, company insiders, and unscrupulous brokers make substantial profits when they sell their shares at inflated prices. When the scheme is over, the security’s price plummets. This leaves innocent investors who paid a premium price holding worthless shares.

https://www.issuerconsulting.com/services/15c211-application/

Of note in the case of GVSI is the following.

inconsistent financial statements, altered financial statements, or altered certificates of incorporation.