Drone Services USA Inc. (DSUS)

[Cassandra]

Paid promotions of penny stocks have existed for many decades. Originally they were done by boiler room calls, mailed newsletters, fax blasts or as broker "chop stocks." However, the advent of the Internet and email made them much more prevalent. The practice became so common, that the Securities Act was amended with Section 17b to require a promoter to disclose the specific compensation for each security it promotes. Unfortunately most promoters don't fully comply, especially those compensated by third parties who are themselves selling stock they purchased from a company at a steep discount or as an attempt by companies use a third party to circumvent the law.

Several years ago it was relatively common for promoters to be paid in free-trading stock, however SEC enforcement actions regarding abusive trading by some high-profile promoters has caused the majority of promoters to require cash rather than stock in recent years.

Paid promotions are done when a company is diluting and demand for the stock needs to be stimulated to increase demand to purchase the larger supply offered for sale and are a signal of dilution.

SECURITIES ACT OF 1933 - SEC 17b

(b) It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof.

http://sec.gov/about/laws/sa33.pdf