I've observed many PK companies issue Rule 504 shares over the last several years and they all undergo massive dilution with a declining share price that often ends up with no bid and a $.0001 ask. I don't believe I've ever seen it done legally.
The DTCC often ends up issuing chills and suspensions or exiting the CUSIP from the CNS.
Although the SEC has begun to take action against some of the toxic financiers who buy the newly-minted shares from the company, often at a 50% or greater discount to market, and then immediately sell them to the public illegally (e.g. TJ Management and Fairhills Capital), the practice is still widespread. The Commission needs to go after the attorneys who write the bogus opinion letters supplied to the TAs, the TAs who turn a blind eye to obviously illegal schemes and the CEOs who ink these deals knowing they are illegal.
An extreme example of Rule 504 dilution is DNAD, which has sold shares to Fairhills Capital and Magna Group and continued to sell 504 shares even after the SEC action against Fairhills. The company diluted itself to no-bid, did a 1 for 500 reverse split and began the dilution anew, selling 642.5 million new free-trading shares in March that are being dumped on the open market with the help of a massive stock promotion effort involving 40 newsletters. The stock is down 99% from its post-split price and 98% since the massive promotion began a month ago.
In general, its best to avoid holding stock in any company that has a Rule 504 offering.
Market Data 
Markets 
AI
