Notice of Filing of Proposed FINRA Rule 6490 (Processing of Company-Related Actions
SECURITIES AND EXCHANGE COMMISSION [Release No. 34-61189; File No. SR-FINRA-2009-089] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed FINRA Rule 6490 (Processing of Company-Related Actions), To Clarify the Scope of FINRA's Authority When Processing Documents Related to Announcements for Company-Related Actions for Non-Exchange Listed Securities and To Implement Fees for Such Services December 17, 2009.
[...] The SEC has expressed concern that certain parties may be attempting to use the facilities of FINRA, including the noted ministerial functions described above and requests to announce Company-Related Actions, to further fraudulent activities.3 While it is understood that FINRA does not operate a “listing market” and has no privity with OTC issuers, FINRA's OTC operations involve a wide range of touch points with OTC issuers and require FINRA to carry out a variety of labor-intensive tasks (e.g.,OTC issuers interact directly with FINRA operations staff to announce a full range of Company-Related Actions). As such, there is concern that FINRA's Company-Related Action processing services may potentially be utilized by parties to further microcap fraud on the part of the OTC issuers and penny stock promoters. [...]
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