TADF is strong imo Look the Feds are starting to crack down!
Jun. 7 2011 - 10:38 am | 0 views | 0 recommendations | 0 comments
By NATHAN VARDI
WASHINGTON - JUNE 04: Securities and Exchange...
Is Robert Khuzami getting serious about the Over-The-Counter market?
In a move that indicates regulators may finally be ready to crack down on the blatant stock manipulation that takes place each day on the Over-The-Counter market, the Securities & Exchange Commission on Tuesday suspend trading in 17 penny stocks.
The SEC shut down trading in companies like Cascadia Investments based in Tacoma, Wash., and Laidlaw Energy Group, based in New York City, citing “questions about the adequacy and accuracy of publicly available information about the companies.”
Promotions of penny stocks that should never have been allowed to trade have been rampant on the Over-The-Counter market for years, but Robert Khuzami, the SEC’s enforcement chief, claims his 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.”
For the SEC, going after the penny stocks trading on the Over-The Counter market is like shooting fish in a barrel. One of the companies that had trading of its shares suspended today is Calypso Wireless, which has not filed periodic financials since February 2008 but has seen its stock go wild on sudden massive increases of trading volume on the Pink Sheets. The suspended shares of another outfit, Kore Nutrition, spiked on August 31 last year following the release of a research report that the company paid for that set a target price of $10.50. Then there is Montvale Technologies, which the SEC says had its shares rise by 75 percent on increased volume of 500% in a single day last December even though the company announced its own dissolution months earlier.
The Over-The-Counter market is a magnet for microcap fraud, as the SEC itself has repeatedly warned. Every once in a while the SEC claims to be cracking down. In a special 2004 microcap stock guide for investors, the SEC said it had “toughened its rules and taken actions against wrongdoers,” but then claimed “we can’t stop every microcap fraud.”
Stocks in the Over-The-Counter market are quoted on systems like the OTC Bulletin Board, an electronic quotation system, and the Pink Sheets, which is not registered as a stock exchange and is named for the color of paper on which its listings of price quotes for companies have historically been printed. Anyone thinking of investing in shares of thinly traded companies that trade on either system should beware.
AI
