I REALLY LIKED WHAT I READ>>>MAYBE OTHERS SHOULD DO THE SAME>>>>>>
GO PETRO GO?!? Maybe a lot of us should be THANKING those that are trying to get us "TO OPEN OUR EYES" to exactly what IS going on here. I myself want to thank :harleyboy,FFF,pooper, and a few of the others that have helped me learn a few things THANKS GUYS. And I really want to wish EVERYONE a Merry Christmas.I don't want to wish anyone bad BUT those who took money and made promises, remember: KARMA>>>>it DOES exist.
A typical pump-and-dump scheme involves somebody making falsely optimistic claims (the pump) via a press release or an e-mail about a shell company whose shares trade for a few cents. Unsuspecting investors buy the "penny stock," causing its price to double, triple or more. Then, scamsters sell shares (the dump) at a profit, leaving other investors holding what turns out to be nearly worthless stock.
Regulators shake their heads at the lengths some go to snare victims. "Some of these bad guys rig the Internet. You can rig the Internet to lure investors into a false sense of security," says Cameron Funkhouser, NASD's senior vice president of market regulation. For instance, some create a fake message board where it appears dozens of investors are gushing about a company's hot prospects. Stocks on the Pink Sheets system fall between the cracks of regulation. The NASD regulates brokers, not the stocks they trade. The Securities and Exchange Commission, with few exceptions, regulates only companies with more than $10 million in assets and more than 500 shareholders. Virtually no stocks traded on the Pink Sheets clear that bar.
"As a practical matter, smaller companies tend to fall below the SEC's radar and state regulators'," says John Coffee, securities law professor at Columbia University. "They're too small."
That means a lot of latitude for anyone who wants to abuse the system. Only when a penny-stock scam runs blatantly afoul of the law or violates anti-fraud provisions can the SEC get involved.
Reverse mergers.
It's easy for anyone to "take their company public," thanks to the fact that there are hundreds of shell companies trading on the Pink Sheets that exist on paper but have no assets.
Consider Wind Farming, created when William Telander bought a Pink Sheets-listed company called Applied Research. Applied had no assets, just a Pink Sheets listing, according to an SEC complaint filed this year. After buying Applied, Telander changed the name to Wind Farming, which allowed him to avoid regulatory scrutiny because he took over another company rather than issuing new stock. Starting as far back as summer 2004, Telander began issuing trumped-up and "false" press releases extolling Applied's success, the SEC complaint says, including fabricated business contracts. Trading volume soared from basically nothing to more than a million shares a day, the SEC says, allowing Telander and a group of partners to make hundreds of thousands selling shares. The attorney representing Wind Farming declined to comment.
Problems don't occur only on the Pink Sheets. Enron traded on the NYSE. WorldCom was on the Nasdaq. But companies on the Pink Sheets get greater freedom because there are no listing requirements and there's no dedicated regulator. Companies don't have to meet any standards to be on the Pink Sheets and don't have to put out financial statements. Even Sarbanes-Oxley rules designed to clamp down on corporate games don't apply to Pink Sheets-listed companies.
The SEC usually gets involved only if scamsters get so greedy that they issue additional shares rather than just pumping and dumping existing shares, says Gidon Caine, securities lawyer at Dechert LLP.
Meanwhile, Pink Sheets stocks have the appearance of being like any other stock. Even mainstream websites, such as USATODAY.com and Yahoo Finance, provide quotes on Pink Sheets stocks that give them the appearance of being regular exchange-traded shares.
Old scams never die. They just get new names and snare fresh victims.
That vicious cycle is powering a renaissance in pump-and-dump schemes on the Pink Sheets, the Wild West of Wall Street that is a breeding ground for penny-stock scams.
Pink Sheets used to literally be pink sheets of paper that brokers used to trade stocks that didn't meet the listing requirements of an exchange, such as the New York Stock Exchange. Now, it's the label for a computerized network that allows investors and brokers to buy and sell stocks without getting near an actual stock exchange.
The scant regulatory oversight that allowed penny-stock scams to rise in the first place is enabling their comeback. And they're surfacing with a vengeance because of technology that makes it easy to reach millions of investors via e-mail and instant messages on cellphones.
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