Replies to post #17073 on DD Support Board and Research Team

[Renee]

Yes, Stock Barber, the illicit shares originate from the company but the Transfer Agents ( a Gatekeeper ) exacerbate the problem when they accept bogus Legal Opinion Letters to permit the sales of shares through improper or illegal exemptions from registrations. All panelists want mandatory rules for lawyers writing Legal Opinion Letters to personally vet the company issuing the shares, ie to visit the company to ensure there are actual operations, and other checklist confirmations of business legitimacies. That affirmative action alone, ie mandatory rules for lawyers, would stop many scam operations.

The problem is also exacerbated by Broker Dealers ( also Gatekeepers ) who " wittingly or unwittingly " permit retail clients to buy and sell shares that the B.D. should have vetted as being legitimate from the Issuer, or for the B.D. to minimally submit a Suspicious Activity Report ( SAR ) to the SEC and DTCC to look into a company's share offerings when there are unusually high volumes occuring. More Broker Dealers are refusing to allow opening positions but concomitant to that action they should also submit a SAR to the SEC and DTCC for suspiciously high volumes.

SEC Chairman Schapiro wants all Gatekeepers to take an active role in submitting SARs because the Gatekeepers are the first line of defense in alerting the Regulators to microcap fraud.