Attn. ALL Pinksheet Investors/Traders!
Please read this in it's entirety. It concerns YOU!
Currently, some investors are experiencing considerable difficulties/expenses for trading in pinksheet stocks. Rest assured, these same problems will likely be coming to you/your own clearing house, be it in-house or otherwise, as the trade-clearing costs for pinksheet companies are fast becoming too unbearable for brokerage firms to absorb themselves.
While these 'issues' currently pertain to DTCC-cleared investors, it ultimately pertains to anyone who trades pinksheet stocks. IMVHO, the DTCC's actions are just the beginning to the end of ALL pinksheet companies that sell unregistered shares. The House of (crooked pinksheet) Cards is just beginning to fall.
Penson's non-DTC eligible stock issues:
After having been slammed exorbinent 'fees' twice by Penson for physical clearing, I have begun to understand why Penson has taken this course, and believe it may become an issue with all brokers, big and small, in due time.
While the full story is somewhat longer, the gist of it all stems from publicly traded companies that have sold unregistered shares, ie; shares not registered with the SEC. The DTCC (the clearing house for Penson) is finding some/many of these shares to be counterfeit and are now determining it is better to simply not clear electronic trades made on ANY company with unregistered shares in the market. Instead, the trade must be accounted for physically, which is where the exorbinent costs arise. These actions (physical clearing) saves the DTCC from the possibility of being stuck with bogus shares by, basically, using the principle 'better safe than sorry'.
It is likely that all other brokerage firms who clear trades themselves, will eventually follow suit. However, this will pose a major problem for them, as they will find they hold counterfeit shares and certainly won't want to be forced to cover that loss, if they cannot dump them elsewhere first. The DTCC is smart. They're ahead of the inevitable 'implosion'. They're eliminating their risk exposure first, before it becomes an 'across the board' dilemma. You won't find the DTCC holding any counterfeit shares. When all the other brokerage firms begin charging clearing costs, watch for the implosion of all non-reporting companies. Non-reporting companies will either be forced to begin reporting, or they'll fold for lack of funds required to become current.
While Penson is being casted as a crook for these exorbinent fees, the blame truly falls in the lap of every company that has issued shares without registering those shares with the SEC.
(For traders of pinksheet stocks, it may do well to know in advance if prospective or current positions in companies have ever issued unregistered shares. It is entirely possible to buy a DTC eligible stock today, only to have it delisted tommorrow, thereby incurring the exorbinent fees. If the trade-clearing issue becomes widespread, as it appears it will, you may find your broker (regardless of who they are) not willing to allow you to sell, ie; total loss. Kiss the value of your shares good-bye. Worse yet, to add salt to the wounds of your loss, those worthless shares will remain in your account, constantly reminding you of the dangers of pinksheet investing)
It is not inconceivable that stock can be counterfeited any more than real money can/has been counterfeited. We have all heard CEOs say they are not selling new shares despite the daily appearance of dilution. There may very well be truth to this, in some/many instances.
While the 'news' of counterfeit shares may or may not be new to you, you can rest assured the SEC does NOT want the practice to be publicly known, anymore than they wanted to acknowledge naked shorting.
Since the pinksheet market is minimally SEC unregulated, it has become the Wild, Wild West of the stock market, more than ever before. Investors clamour for SEC oversight, but fact is, the SEC is not going to oversee pinksheet stocks anymore than the DEA will oversee/regulate drug trafficking, or the ATF, gun-running. In other words, you're on your own. The Roundtable meeting scheduled (10-17-11) will likely result in very little, if anything at all. Billions of shares have been counterfeited and sold, and there is just no way to rectify that. Bottom line is, naked shorting and counterfeit shares are coming to a head and the DTC is the first to put their foot down.
Below is the most comprehensive list available of non-DTC eligible symbols, updated 10-13-11, by myself. Be aware that this list is continually growing as the DTC discovers companies that have issued unregistered shares.
Remember, this is currently only a Penson issue, but the heart of the problem lies with unregistered (and potentially counterfeit) shares, which virtually ALL brokerages must deal with sooner or later, due to high clearing costs and the inability to 'just pass it (shares) on to the next buyer'.
Pinksheets is the shark-infested waters of the stock market. If you swim with the sharks, expect to get bitten if you're lucky. Eaten, if not.
AAVG
ACHM
ADCS
ADOT
AEMD
AFTI
AGIJ
AKYI
ALGF
ALTO
AMNG
AMNE
ANDI
ANWM
APRM
AQUS
ATPT
AXGC
BEDA
BEHL
BIHC
BKPR
BLUG
BNPD
BRMC
BRZL
BVRG
BYOC
CAEJ
CCME
CDGT
CDIV
CDOI
CGFIA
CHJI
CIST
CLDR
CLYW
CMGR
CMGR
CNEX
COPI
COUV
CPHG
CPMCF
CTTD
CWRN
CYGX
DGMA
DGRI
DIAAF
DMTA
DTGP
DTSL
DVME
ECDP
ECMH
EDLT
EDWY
EFIR
EGOC
EHSI
ELCR
EMLL
EMPZ
EMXC
ENTS
EVSO
EWKS
EWPI
FFGO
FTRM
FNXC
GBRC
GETC
GELVD
GGII
GGMC
GHLV
GLER
GPPL
GRBG
GRDO
GRPS
GSLO
GSHN
GTLA
GTLL
HELI
HIRU
HLXW
HMGP
HNSS
HPNN
HRNF
HSCO
IDOI
IHGP
IMDS
IMJX
IMGR
INAR
INDR
INNP
INOL
ITCJ
IVVI
IVOI
IXMD
JVDTQ
KKUR
KORE
LCOL
LEXG
LFXG
LGSL
LHPT
LKEN
LLBO
LLEG
LVLV
MCCI
MCDA
MCLN
MDOR
MDRG
MDYO
MGLG
MHLI
MNDP
MNSI
MSGI
MSOA
MTEK
MVBY
MWIS
NSHJ
NTBS
NUBL
NWMT
NYMH
OCBM
ONCP
OPGX
ORRV
OPMG
OPTZ
OTOW
PCLO
PELE
PGCN
PHMB
PGNE
PIHN
POPN
PPJE
PPTO
PRMO
PRPM
PPYH
PSGI
PSRU
QMIN
QOIL
QURS
RBDC
RCCH
RGTX
RINO
RLAB
RMBM
RMTD
RSOU
SDRG
SGLS
SFIO
SLIF
SLRW
SMCE
SMHS
SMPP
SNRS
SNRY
SOLI
SOPV
SPLT
SPQS
SPZI
SSHS
SSTC
SREA
SUMM
TAON
TCLN
TEMN
TGGI
TIVU
TLAG
TSNP
TWVH
TYTN
UBEX
UBRG
UCHB
UDSG
UFBV
UNCO
UNGS
UNDT
UPCP
USOG
UTEM
VCTY
VIPR
VIVK
VLCO
VLXC
VSHE
WGAN
WHKA
WNCG
WRIT
WSCH
WWBP
WWNG
XDSL
XNEZ
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