On June 7th the SEC suspended 17 companies in a " proactive effort to combat microcap stock fraud. " In actuality the SEC was reactive. To be " proactive " the SEC needs to fix the existing system that permits endemic corruption.
Although the suspended companies do not report to the SEC some of the companies were suspended for questions ( meaning suspicions ) about the accuracy and adequacy of Financials that had been released to OTC Pink Sheets, as well as questions / suspicions about news releases and stock promotion for the nefarious purposes of selling stock.
Even though an OTC company's Financials are not required to be SEC or Sarbanes Oxley compliant to yearly audits and quarterly audit reviews an OTC's Financials to OTC Pink Sheets are still subject to SEC scrutiny as noted by the 17 suspensions on June 7th. Permitting a non-filer to not even file to the OTC for several years before the SEC intervenes should be radically changed to enforced, timely filing of Financials to OTC.
With the upcoming SEC / Finra Roundtable discussions on fixing the corrupt practices that flourish on the OTC Pink Sheets it would be rather simple to stipulate that companies must submit timely Financials including complete Share Structures to OTC or be removed from quotations until they do file, either by a new designation on Grey Sheets until the offending company complies or a new tier for non-quotations. By forcing OTC companies to file for each quarter and yearly at least the SEC could scrutinize those Financials to assess the adequacy and accuracy of those Financials.
Secondly, the SEC / Finra Roundtable should immediately implement enforced transparency upon ALL Transfer Agents for an OTC company's entire Share Structure as of any enquiry date. Failure to comply should also relegate a company's stock to a non-quotation tier until the T/A can or will release the entire share structure. Gagged Transfer Agents should be forbidden toute-de-suite.
Corrupt OTC companies would still be corrupt but would be vulnerable to quicker SEC interventions and non-quotation designation for non-transparency until remedied to the required transparency.
The SEC and FINRA have the power. It's time they got " proactive " on ALL OTC Pink Sheet stocks.
To bite the worm of incite is to bite the HOOK of the antagonist . They win .
