Replies to post #117280 on DD Support Board and Research Team

[nodummy]

A person that files a custodianship petition to take control of an abandoned shell isn't buying the shell (unless you count the small cost of submitting the filing with the courts the price of purchase for the shell).

"hijack" is a term used by the SEC to explain their shell expel program they initiated in 2012. I'll let the SEC explain in their words:

https://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171489086

Washington, D.C., May 14, 2012 —

The Securities and Exchange Commission today suspended trading in the securities of 379 dormant companies before they could be hijacked by fraudsters and used to harm investors through reverse mergers or pump-and-dump schemes. The trading suspension marks the most companies ever suspended in a single day by the agency as it ramps up its crackdown against fraud involving microcap shell companies that are dormant and delinquent in their public disclosures.

https://www.sec.gov/news/pressrelease/2015-44.html

Since it began in 2012, Operation Shell-Expel has resulted in trading suspensions of more than 800 microcap stocks, which comprises more than 8 percent of the OTC market.

Like the SEC, I feel the term "hijacking" is fitting for what is going on. These people that are coming in and taking control of these abandoned shells are not buying the shells from anybody. They are not being voted into power by the existing shareholders. They are not getting control of the shell because of any acquisition agreement. They are simply stealing the shells through the local court systems.

I'm not going to go through all of the hundreds of custodianship filings to try to sort out which are done by the book from start to finish (the large majority of them are not). Some may have a legitimate claim to the entity because of money owed to them which cant be collected because prior management left, but for most custodianship petitions, that is not the case.

Just because a state court approves the petition doesn't make it totally legal on every level. It's like all these state court proceedings to use the 3(a)10 exemption to turn debt into free trading stock. Just because some state court approves the settlement doesn't mean the transaction is legal by SEC standards.

My concern is how these shells are being used after they are hijacked through the court system. Just in the post you responded to there are several examples of custodianship shells that ended up getting used for criminal behavior leading to Indictments. I could make a list of dozens of custodianship shells that ended up being used for criminal behavior that led to Indictments.

An even larger number of these custodianship shells are being used for pump & dump activities without being named in criminal indictments. The hijackers often times create convertible debt Notes from the fees associated with gaining control of the shell then use that debt to create tens if not hundreds of millions of unregistered discounted free trading shares of stock. The hijackers or associates of the hijackers will often sucker gullible naive small business owners into using their shells for reverse mergers as a way to raise capital for their struggling businesses then offer to provide the financing and services needed to make the going public process easy. Later those liabilities for the services and the financing are turned into discounted unregistered free trading stock and dumped during pump & dump activity.

Bottom line is that these abandoned shells, way more often than not, are just used for dirty insider enrichment schemes and pump & dump schemes and are not good for the market.

[janice shell]

Several things. His applications are full of lies and omissions, for openers.

https://www.securitieslawyer101.com/2016/adam-tracy-attorney-custodianship-shell-companies/