creede
4 years ago
HaHa — I doubt it.
My complaint is they routinely put their order ahead of the customer order in unsolicited pinks. Often they fill 100 for the customer and 9900 out of their own stash. The problem isn't quite as profound as it used to be. I think perhaps it's because the old NITE is BK — good riddance!
That's interesting that they want to be in control. I would say — that you would say — that would be like letting the inmates run the asylum (!).
I particularly like items number 2 & 3 from the blog post....
2. Better inform market participants with improved insider reporting and disclosure and regular large investor filings for all publicly traded securities
3. Eliminate information asymmetries by clarifying Rule 10b-5 restrictions on insiders and affiliates trading when adequate current information is not publicly available or increase restrictions on current and former affiliates selling after business combinations or reverse takeovers
https://blog.otcmarkets.com/2020/05/01/exploring-the-investor-impact-of-an-sec-rule-proposal/
I presume you do not like custodial plays because it gives old management (or IR) a new means to unload their shares?
If they run a company into the ground (or never had a real business plan in the first place) there should be a mechanism to cancel their shares and return them to the treasury. I think that's what they are getting at in item #3.
re laissez-faire:
The sexual revolution is long gone and so are the days of front loading, pumping & dumping, reverse-splitting, rinse and repeat MoMo stocks.
It just does work anymore like it used to. The Wild West is getting more civilized now because there is far more oversight. All kinds of warnings, traps, and mechanisms to catch the outlaws and warn investors to avoid certain securities.
The sheer fact that they are telling them to record the name of everyone who places an order for an unsolicited trade tells you the monitoring system is far more sophisticated than it used to be. They expect the Broker-Dealers to "know their customer" (I read that somewhere last week). If that's what they expect, then they have the means to do it (!) — even if they only do it loosely unless there is an obvious problem.
Big brother is watching.
re Expert Market:
I agree the name is confusing. They should have gone with Roach Motel instead...!
Have a great weekend. Wonderful talking to you. I always learn something.
janice shell
4 years ago
Yes. BUT the proposal is in large part about not allowing MMs to publish quotes for shell companies under any circumstances. That's a GREAT idea. If properly implemented, it'd make custodianship shells worthless, for example. There is, of course, much more to it.
The proposal has FINRA's pretty much unqualified support. Unfortunately, something very similar has been suggested in the past, in a 1998 proposed rule, which was then modified in 1999. It was vigorously protested, and in the end was not adopted. I'm afraid the same may happen again, or that it may in the end be watered down to the point it'll be meaningless.
Unsolicited quotations are addressed, but does what's described in this footnote really happen? I doubt it:
Supplemental Material .01 to FINRA Rule 6432 requires broker-dealers
reliance on the exception provided by Rule 15c2-11(f)(2) (i.e., the unsolicited quotation exception) to “be able to demonstrate eligibility for the exception by making a contemporaneous record of: (a) the identification of each associated person who receives the unsolicited customer order or indication of interest directly from the customer, if applicable; (b) the identity of the customer; (c) the date and time the unsolicited customer order or indication of interest was received; and (d) the terms of the unsolicited customer order or indication of interest that is the subject of the quotation (e.g., security name and symbol, size, side of the market, duration (if specified) and, if priced, the price). Any member displaying a quote representing an unsolicited customer order or indication of interest that was received from another broker-dealer must contemporaneously record the identity of the person from whom information regarding the unsolicited customer order or indication of interest was received, if applicable; the date and time the unsolicited customer order or indication of interest was received by the member displaying the quotation; and the terms of the order that is the subject of the quotation.”
Seems to me that when OTCM allowed more than a dozen formerly suspended stocks to be quoted unsolicited, no such inquiries were made. It "fixed" that by moving them to the "Expert" market, but that was only because I called them and made a fuss.
It's clear from OTCM's THREE comment letters on the proposed rule that it wants to be put in charge of processing Forms 211. It also wants to speed up the process enormously. It believes it should take no more than a few days for a company to have its 211 approved. It also wants companies to be allowed to pay the MM (or IDQS) for its services, which is currently not permitted. To some extent, it has a point: right now, as I understand it, very few MMs are willing to go to the trouble. Just about the only broker-dealer in the business of sponsoring companies and filing Forms 211 for them is Glendale. And the process can take a long time. As long as months. But allowing OTCM just to rubber-stamp them is not, I think, the answer.
The concept of the "Expert Market" is in my view ridiculous. OTCM makes it sound... fancy. Something special, involving trading by "experts". Sophisticated traders. The reality is, it's composed of junk that shouldn't be trading at all. That, however, is the SEC's fault: see what it has to say about "defunct companies":
https://www.sec.gov/fast-answers/answersdfnctcohtm.html
THAT is what opens the door to this bullshit.
Cromwell Coulson, head of OTCM, is a big fan of laissez-faire markets. And that's what he's trying to do with these new "concepts". Accommodate anyone who wants to trade anything at all. Sure, there're a lot of legitimate OTC issuers: the ADRs of big foreign companies; the regional and community banks, and even some microcap companies. But a lot of it--what most of us think of when we think of "penny stocks"--is fraudulent junk that shouldn't be traded in any public market.
And that is something the SEC needs to consider.
The proposed rule:
https://www.sec.gov/rules/proposed/2019/34-87115.pdf
The comments:
https://www.sec.gov/comments/s7-14-19/s71419.htm
janice shell
4 years ago
A lucky few (like ZNXT) have a chance to get current before the SEC makes their decision.
They've always had that choice. It's up to FINRA. If they file a new Form 211, and it's accepted by FINRA, they'll become Pinks--Current Info Pinks--once again. But that isn't happening to Greys that were once suspended. They're being sent to the Expert Market.
Greys that became Grey simply because they lost their MMs because no one was interested in trading them can, and sometimes do, find a new sponsoring MM, and begin trading once again as Current Info Pinks. But that's always been the case, and is an issue separate from the Expert Market or Unsolicited Trading issues.
The SEC has no "decision" to make.
janice shell
4 years ago
Have you noticed all stocks that the SEC suspends now go straight to Expert?
Well, they don't go "straight" to the Expert Market, but it happens pretty quickly. BUT, as with the Greys, Expert stocks have no published quotations. Again, the Expert Market stocks are just Greys with electronic trade execution.
Early this year, they "accidentally" moved a number of formerly suspended stocks to unsolicited trading. I called them about it. They didn't thank me, or admit anything, but within a few hours, they were moved from Pink No Info, trading unsolicited, to the Expert Market, where they couldn't be quoted.
janice shell
4 years ago
Oh, I know. The Expert Market is really just the Greys, but with electronic execution. Nonetheless, I think it's a bad thing. The name "expert" suggests something good, and there's nothing at all good about the stocks in question. Worse yet, I suspect OTC Markets has bigger things in mind for it; things they haven't yet fully articulated.
The business of this sudden spate of unknown people asking MMs to submit requests--to to OTC Markets, not FINRA, much less the SEC--to trade stinkers like ZNXT unsolicited is even worse.
I've posted a lot about it on the DD board:
https://investorshub.advfn.com/DD-Support-Board-and-Research-Team-19670/
You can find my posts by searching for "unsolicited" in a board search for 2020. I think the people who're mostly profiting are toxic lenders stuck with stock they can't unload as long as the stocks are on the Greys.
janice shell
4 years ago
No, it wasn't suspended in 2009 or at any other time, though it should have been.
https://www.sec.gov/litigation/suspensions/suspensionsarchive/susparch2009.shtml
It was, however, sued by the SEC for fraud in 2009:
https://www.sec.gov/litigation/litreleases/2009/lr21084.htm
Presumalbly OTC Markets doesn't know that. Frankly, the people who deal with this stuff don't know much about old penny scams.
slow and steady
10 years ago
Pheman, thanks for this info.
http://biz.yahoo.com/e/140902/gryef8-k.html
Extracted from the above link:
VI. Incentives to the dissolved and past ZNext Mining Shareholders: All the existing Shareholders of AU MARCGE MINERALS AG were entitled to convert and exchange all their issued common shares to unrestricted common shares of AU MIN AFRICA PTY LTD (CUSIP No. S31451A 101) at a ratio of 25:1. AU MARCGE MINERALS AG (the company that Acquired the dissolved ZNEXT Mining Corp. in 2012 (CUSIP No. 98975U 108 Common [ZNXT] and CUSIP No. 98975U 405 Preferred
[ZNXPP] Shares) is the holding company of AU MIN AFRICA PTY LTD [CUSIP No. S23141A101]; thus as been passed on June 20, 2014 per Board Resolution and with written consent and approval from 2/3 votes of outstanding shares entitled to vote, are to exchange all issued and outstanding common shares held by its shareholders to the current common unrestricted shares of AU MIN AFRICA PTY LTD [CUSIP No. S23141A101: Stock Symbol: GRYEF] according to the following provisions:
v.(1) 25:1 Conversion Ratio: That for every twenty-five (25) outstanding common shares of AU Marcge Minerals AG are exchanged for one (1) unrestricted common share of AU MIN AFRICA PTY LTD [CUSIP No. S3141A 101]. All shares with One Hundred Thousand (100,000) or fewer will receive four thousand(4,000) new unrestricted common shares of AU MIN AFRICA PTY LTD. The minimum shares each shareholder will receive are four thousand (4,000) shares and rounded up to the nearest one (1) full share.
v.(2)Conversion-Exchange of all shares held by the dissolved and past ZNext Mining Shareholdersmust convert/exchange their ZNEXT Mining common and preferred stocks into the Restricted common shares of AU Marcge Minerals AGfirst and foremost before the ZNXT Mining shares are converted to AU MIN AFRICA PTY LTD - Non-Restricted Common shares [CUSIP No. S3141A 101; Ticker Symbol: GRYE] based upon the following conversion ratios to AU Marcge Minerals AG common shares:
v.(2)i 50:75 Conversion Ratio for Common Stocks with CUSIP No. 98975U108 v.(2)ii 1:10,000 Conversion Ratio for Preferred Stocks with CUSIP No. 98975U
scion
10 years ago
A con artist buys a con artist’s company
A serial fraudster with an aristocratic name used Winick company for her own ‘pump and dump’ stock racket.
By: Tony Van Alphen News reporter, Published on Fri Dec 13 2013
http://www.thestar.com/business/2013/12/13/a_con_artist_buys_a_con_artists_company.html
It takes one to know one.
Con artist Sandy Winick spun out 59 empty companies so he could use them to create a trading market and make money during the last decade. One of them was Pearl Asian Mining Industries.
And in 2005, Pearlasia Gamboa, alias “Princess Bae Catiguman,” bought the company from Winick so she could sprinkle some personal marketing magic on the firm and turn it into gold for herself.
MORE FROM THESTAR.COM:
Thai police nab last Canadian in alleged penny stock fraud
Sandy Winick: Alleged penny stock fraud kingpin arrested in Thailand
$140-million penny stock fraud: Canadians among the accused
The U.S. Securities and Exchange Commission later charged that Gamboa used the company, which changed its name to ZNext Mining Corp., for a “pump and dump” stock manipulation scheme. She orchestrated the sale of 1.9 billion shares and issued a series of news releases touting mining activity in the Philippines and a cost-saving ore refining system, according to the SEC.
The stock climbed and Gamboa collected more than $1 million in three years before the share price fizzled.
A district court judge ordered a default judgment totalling $1.8 million and a lifetime trading ban against her in 2010 as a result of the case. She never showed up in court or paid the penalties.
A U.S. court later permanently barred her from selling penny stocks.
ZNext has also popped up in a much bigger scheme as part of a U.S. crackdown of international investment fraud.
U.S. investigators have described Gamboa as a serial fraudster after other brushes with the law.
Gamboa, who is in her early 60s, has portrayed herself as an investor and president of the Dominion of Melchizedek, a tiny island in the South Pacific, according to one San Francisco magazine.
It found the atol has never received diplomatic recognition from most countries because its territorial capital lies underwater at high tide.
“Getting to the bottom of the truth requires delving into a story that might have resulted from an artistic collaboration between Ian Fleming and Salvador Dali,” the magazine concluded.
http://www.thestar.com/business/2013/12/13/a_con_artist_buys_a_con_artists_company.html
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