Whazoo, I normally agree 100% with your posts and find them spot on. With this one, I disagree, ain't America great. I am sure you know all about the setup but for those who may not, I will give a brief and probably lousy description of SARBOX's shortcomings.
The Pinksheets of yesterday are not the Pinks of today, there are more stocks lurking amongst the crappy stocks that have merit and substance. Why? In a word SARBOX. Sarbanes Oxley was created to ferret out some of the criminal element in todays stock market. It is an across the board enactment that includes all the major Boards, NYSE, AMEX and NASDAQ/OTC and excludes only quotations from the Pinks. It's big flaw? It costs firms in the OTC microcap range disproportionately large fees when compared to the firms of the larger exchanges. These fees can take a smaller, honest growing firm and bankrupt them.
The result after about a year of Sarbox was savvy U.S. startup companies were avoiding U.S. market and applying to Boards outside the U.S., most particularly the London A.I.M.. The other alternative was downlisting to the Pinksheets to avoid the burdensome costs of Sarbox. The U.S. system of small firm incubation has been hugely stifled with the enactment of SARBOX. Small U.S. startups have lost their access to the capital because of over regulation.
The London AIM is the equivalent of our OTC but has Government registered advisers ie, Attorneys and Accountants who
oversee and consult with the startup firms to help both in their business acumen and financial filings. This helps ensure their success in addition to providing greater financial transparency for potential investors. The new Pinksheets is modeled after the AIM. Many see this as an excellent alternative and in fact, a similar system from the AMEX is on the way. This represents competitive America at its best IMO. The key to this system is the Advisers. We will still have starving companies but they now have qualifed experienced professional advisers to steer them around some of the pitfalls of former generations. http://www.pinksheets.com/pink/otcguide/issuers_service_providers.jsp?sptype=lc
The basics of this head to one point. Which is more effective, Federal control or Private or any project or agency? Would the Postal System be more effective if privately held or is it best keep under the Government's jurisdiction? Would the SEC be better in Private hands or is it best as a Federal entity. The Pinksheets are the only Privately managed system and are attempting to make the changes necessary to rival the OTC in quality and and already out pace them in lower costs.
Of note are the amount of downlistings that now occupy the Pinksheets Quotation system. Hundreds of very successful honorable companies based both in the U.S. and outside have gone with the Pinksheets Quotes to avoid the mess of SARBOX. Based on Congresses overreaction, they are starving our smaller companies with regulations. Not to create a political controversy but I liken it to "when guns are criminalized, only criminals will have guns".
Pinksheets and their new management, have grown faster than all the other exchanges and have simply reacted to Congressional over regulation. I think it will prove to be a success.
Carry on with your evisceration of the ill informed and I'll cease my ranting.
This post is an opinion and should not be considered reason to buy or sell any security, or to besmirch, belittle or berate any person, religion, cult, creed, race, sex, political party, company or company representative of any age or appearance.
