SEC Suspends Trading in 17 Penny Stocks
Posted June 07, 2011 10:44AM PST
The Securities and Exchange Commission suspended trading in 17 microcap stocks today over questions about the adequacy and accuracy of publicly available information about the companies.
The reverse merged companies suspended in the crackdown included Calypso Wireless, a Houston-based company that went public in 2002; Global Resources, a Morrisville, N.C.-based company that went public in 2006; Go Solar USA, a New Orleans-based company that went public in 2010; Kore Nutrition, a Henderson, Nev., company that went public in 2010; and Solar Park Initiative, a Ponte Verde Beach, Fla.-based company that went public in 2010. Prime Star Group, a Las Vegas, Nev.-based shell company, was also suspended.
The suspensions are a product of the SEC's new Microcap Fraud Working Group, which is targeting insiders, promoters, transfer agents, attorneys, auditors, broker-dealers, and other "'gatekeepers' who flourish in the shadows of this less-than-transparent market," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement.
The SEC moved on some of the companies because questions were raised about the amount and quality of the information available to investors, while other companies had trading suspended over information being distributed that was of a questionable nature.
In the case of Kore Nutrition, its share price began to climb after a company-sponsored research report was released last August. The stock price eventually reached $10.50. The company sent out press releases in September announcing new distribution agreements for energy drinks and stock websites began touting the agreements and promoting the stock. But the company's annual filing with the SEC in November did not mention the agreements.
The SEC suspended the stocks until June 20.
Source: SEC Release
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