The Securities and Exchange Commission suspended 17 microcap stocks that trade on the over-the-counter market, citing questions about the adequacy and accuracy of publicly disclosed information.
"They may be called penny stocks, but victims of microcap fraud can suffer devastating losses," said Robert Khuzami, director of the SEC's division of enforcement. "The SEC's new Microcap Fraud Working Group is targeting the insiders and promoters, as well as the transfer agents, attorneys, auditors, broker-dealers, and other gatekeepers who flourish in the shadows of this less-than-transparent market."
The 17 companies suspended are American Pacific Rim Commerce Group (APRM), Anywhere MD Inc. (ANWM), Calypso Wireless Inc. (CLYW), Cascadia Investments Inc. (CDIV), CytoGenix Inc. (CYGX), Emerging Healthcare Solutions Inc. (EHSO), Evolution Solar Corp. (EVSO), Global Resource Corp. (GBRC), Go Solar USA Inc. (GSLO), Kore Nutrition Inc. (KORE), Laidlaw Energy Group Inc. (LLEG), Mind Technologies Inc. (METK), Montvale Technologies Inc. (IVVI), MSGI Security Solutions Inc. (MSGI), Prime Star Group Inc. (PSGI), Solar Park Initiat ives Inc. (SOPV) and U.S. Oil & Gas Corp. (USOG).
The trading suspensions result from a joint effort among several SEC regional offices, its Office of Market Intelligence and the new Microcap Fraud Working Group, which looks to detect fraud involving microcap securities.
The SEC said stock-touting websites, twitter users and often anonymous individuals posting to message boards have influenced the investment decisions of the public, which often doesn't have adequate information about the securities.
As an example, the SEC said Calypso Wireless hasn't filed periodic reports since February 2008. In spite of this, the shares rose to an intra-day high of 17 cents on Sept. 24, the same day a stock-promoting website allegedly encouraged investors to continue buying the stock. The stock traded at 4 cents on Sept. 21.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
(END) Dow Jones Newswires
June 07, 2011 10:15 ET (14:15 GMT)
“Those who don't know history are destined to repeat it.”
Edmund Burke (British Statesman and Philosopher0, 1729-1797
"Those that do know history can choose to repeat it."
frankie_fillet (Slag for the man} 2011
