It is always common shares or conv. preferreds or conv. notes from the LLC (or pink selling) from the new promoter of a new shell or another pinky. The sellers make a ton of money selling the shares on the open market...to people like you and I. ;-) That is why crooks like TS and Fuentes are into the pink sheet stock market and why pinks have become a swamp of con men and women.
It is perfectly legal to sell stock so that is what they do...and a lot easier to make a lot of money pretty darn quickly than trying to operate a real business to generate sales and profits.
Of course, if the scammer misses a que on the SEC rules, like TS and Fuentes, they can get nailed. All stockholders become stuck pigs with virtually no recourse.
We need to drain the swamp and tighten up the rules so honest folks don't get screwed like here with SFIO. This sort of thing is going on throughout the OTC market....with the pinks being the biggest problem. Lack of rules regarding transparency and timely disclosures to stockholders. (There really should be a law against their ability to print money (shares) to the extent they do, as well. gl
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