Mark-It's not just SOX. Even beore that law was passed many European companies chose to have their ADR's trade on the pinks because providing financial statements that conform to US GAAP standards would have resulted in significantly, and in some cases wildly dirrering reports of earnings, assets ect.
Many small community banks, regional REIT's, and small manufacturers also trade legitimately on the Pinks. They also disclose financial and share structure information to investors, and to potential investors.
Legitimate small companies areare burdened unnesessarily by SOX. However, I think it should be required that any company for which an electronic quotation is displayed on the pink sheets trading platform should at a minimum have open TA records, and make at least semi-annual financial statements available on a company website. Those changes-and clamping down on the misuse of registration exemptions-would go a long way toward the prevention of pump and dump scams.
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