Replies to post #14095 on Shell Stocks; Reverse Mergers; Acquisitions; Zombi

[$hellKing]

I couldnt agree more. AND I KNOW for a fact that brokers get a heads up on suspensions before retail investors. I had several occasions where TDA and other brokers had issues the day or two before a suspension. The stocks were fine 3 or 4 days before but all of sudden it gets blocked in some way. It was as though they got a heads up on it. Ive also seen many times where there were big dumps on a stock right before the suspension. someone had a heads up on those. So I believe some MMs and brokers are given a heads up someway which is not fair at all. I know that sometimes it could be the company insiders who could be selling bc they got the call. Ive seen that before where CEOs or CFOs were lying to me and saying fins almost done and shares start appearing that were never there for years on end.


One thing I have learned in life the two worst qualities for one to have is narrow mindedness and ignorance. They can only see things their way. They have no clue our side of things. They think they do but they dont. Its a total different world.


These surprise things arent fair. One minute you have 2500 bucks invested and the next minute its completely worthless. And their ways are all over the board. 20 year old shell gets suspended while a shell thats 11 months behind gets suspended.


And Im sorry guys it is not promo or fraud stuff getting suspended. They are suspending stocks all across the board. Many of them are deregistered. Many of them are still ative on sos and a lot never ever went inactive on SOS. some of them had a good bit of cash still listed on the books. I bet I could DD and find the co contact info 1000% better than they ever could.

[rich pearl]

many years ago i was in a stock that over the course of 4 months had a run from .11 to 5.06. though there was consistent volume, and obvious buying pressure on the stock, it was a slow grinder that washed most of its shares at each top it made. every week a few shares would go off on the bid, and then the ask would get pounded, and upward it crept. i kept track of the trading through the logs and charts and marvelled at the idea that a stock with an O/S of less than 50M could SELL so many shares when according to the TA the float and outstanding changed so little. i talked to the company, i was beta testing their product, and they told me it was just the way of the otc with lots of phantom trades. then i had a conversation with one of their financiers, and because i'm a believer in death by financing -- convertible debenture and discounted shares are the bane of all holders -- i called him out on the dilution, and asked him about the possibility of an SEC investigation.

he roared with laughter and said, "as long as it never has enough blow-out volume and cash flow to put it under the watchful eye of the SEC, this can go on for quite awhile. just enjoy the ride."

yup! all the way back to sub penny -- this was in the days before the fourth digit was de rigueur in walking a stock up or down. he even let me work out the details in figuring out just how many shares they were washing through the system, and he had no qualms about it being reported to the SEC, as was done by two of my friends; he was already lawyered up.

it was a little more than a year later that the stock was finally halted, but not by the SEC. it was the FBI, who indicted twenty-four people, including the CEO, IR guy, comptroller, etc, as part of a mob operation to launder money through four stocks. while there was quite a few who made outrageous coin from that play, much more than that was lost by the investor/speculators who believed in the story and went long.

this is quite the game, isn't it.

[Potse]

SEC's suspension policy does a disservice to investors.....

The current approach the SEC takes toward suspension/revocation of delinquent or dark tickers really does a disservice to the average retail investor. There is simply too much inconsistency and not enough adequate public disclosure of its policy and actions. It needs an overhaul.

There really is no excuse why the SEC can not conduct its suspension/revocation process completely in the open. Every investor should be given the opportunity (in real time) to know when the SEC has contacted a potential suspension/revocation target, exactly what the SEC is requesting/demanding of the company, any exact timelines for response/punishment the SEC has made, and any response the SEC has received from the company.

By not making full disclosure of all of this, the SEC potentially allows insiders/friends/associates of the company an opportunity to make a buy/sell decision while the average retail investor sits there in the dark unaware of what is going on behind the scenes. For an organization that is supposedly looking out for the "little guy", this is an completely unacceptable way to handle the situation.

I made the above post last year (excerpt shown), and it seems as relevant now as it was then. Unfortunately, it doesn't look like the SEC is going to make any change in how it handles its suspension/revocation policy. While some of the SEC's intentions may be admirable, the manner in which it implements this policy needlessly harms many investors in this section of the market.

I like to pre-position myself in shells or dark companies prior to any corporate activity showing up, but this SEC policy certainly increases the risk level in these types of investments and makes it more and more difficult to take anything more than just token positions in many of these stocks.

A lot of these higher quality dark shells (like AHAG, PURY, ZHDM, etc) hold the potential for some amazing returns, but almost everyone of them could be immediately suspended/revoked. It pretty much depends on the whims of the SEC.