FINRA & SEC Issue Investor Warning on Penny Stock Fraudsters


The term penny stock has evolved with the market. In the past, penny stocks were stocks that traded for less than a dollar per share. The SEC, however, has modified the definition to include all.

Companies quoted in the OTC Pink tier are assigned different symbols by OTC Markets, depending on whether they have provided "current" information, "limited" information or "no information. They join states like Colorado, which legalized recreational pot back in Making Money with Options.

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SEC Suspends Trading of 3 Penny Stocks With Tenuous Ties to Cryptocurrency, Blockchain by Andrew Nelson PM Today, February 16, , the Securities and Exchange Commission (SEC) issued a press release announcing trading suspension of three companies that acquired AAA-rated assets from “a subsidiary of a private equity investor in cryptocurrency and blockchain technology, .

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Don't forget choose a topic. Gold and Silver Alerts. We've spelled out the questions you'll need to ask in the following publications: Internet Fraud and Ask Questions.

When you ask these questions, write down the answers you received and what you decided to do. Let your broker or investment adviser know you're taking notes.

They'll know you're a serious investor and may tell you more - or give up trying to scam you. We've developed a form for taking notes at http: Never tell a cold caller your social security number or numbers for your banking and securities accounts. And be extra wary if someone you don't know and trust recommends foreign investments. Avoid Getting Burned by "Hot" U. By law, you only have a limited time to take legal action. Follow these steps to solve your problem: We will forward your complaint to the firm's compliance department and ask that they look into the problem and respond to you in writing.

Please note that sometimes a complaint can be successfully resolved. But in many cases, the firm denies wrongdoing, and it comes down to one person's word against another's. In that case, we cannot do anything more to help resolve the complaint. We cannot act as a judge or an arbitrator to establish wrongdoing and force the firm to satisfy your claim.

And we cannot act as your lawyer. Securities and Exchange Commission. A Guide for Investors Sept. What Is a Microcap Stock? Where Do Microcap Stocks Trade? Fraudsters may claim that an OTCBB company is a Nasdaq company to mislead investors into thinking that the company is bigger than it is. OTC Link LLC OTC Link is an electronic inter-dealer quotation system that displays quotes, last-sale prices, and volume information in exchange-listed securities, OTC equity securities, foreign equity securities and certain corporate debt securities.

In addition to publishing quotes, OTC Link provides, among other things, broker-dealer subscribers the ability to send and receive trade messages, allowing them to negotiate trades. OTC Link organizes securities into three marketplaces based, in part, on the amount and quality of available information: A Word About Offering Requirements Any company that wants to offer or sell securities to the public must either register with the SEC or meet an exemption.

Reg D also exempts some larger private offerings of securities that are sold exclusively to accredited investors and other sophisticated investors. In general, offerings under Reg D are not permitted to use the internet, broadcast media or other means of 'general solicitation and general advertising' to attract investors. In legislation enacted in called the 'JOBS Act,' Congress required the SEC to permit public advertising in Reg D offerings where securities are sold only to accredited investors and the issuer takes reasonable steps to verify that they are accredited.

While companies claiming an exemption under Reg D don't have to register or file reports with the SEC, they must still file what's known as a "Form D" within a few days after they first sell their securities. Form D is a brief notice that includes the names and addresses of owners and stock promoters, but little other information about the company.

You may be able to find out more about Reg D companies by contacting your state securities regulator. You will find contact information for your state securities regulator at http: Instead of filing a registration statement through EDGAR, these companies file a printed copy of an "offering circular" with the SEC containing financial statements and other information. Spam allows the unscrupulous to target many more potential investors than cold calling or mass mailing.

Paid promoters are generally behind the unsolicited "junk" faxes, e-mail messages, or high-end glossy mailers you may receive, touting a microcap company. The federal securities laws require the publications to disclose who paid them for the promotion, the amount, and the type of payment.

But many fraudsters fail to do so and mislead investors into believing they are receiving independent advice. These strangers hound investors to buy "house stocks" - stocks that the firm buys or sells as a market maker or has in its inventory. These fraudulent press releases are then disseminated through legitimate financial news portals on the Internet. Once these fraudsters sell their shares and stop hyping the stock, the price typically falls, and investors lose money The Latest Variation of the "Pump and Dump" Scheme Some people are finding that they have received a "misdialed" call from a stranger, leaving a "hot" investment tip for a friend.

If the company is small and unknown to most people, you should also call your state securities regulator to get information about the company, its management, and the brokers or promoters who've encouraged you to invest in the company. Look in the government section of your phone book or visit the website of the North American Securities Administrators Association at http: Even though the company does not have to register its securities with the SEC, it may have to register them with your state.

Your regulator will tell you whether the company has been legally cleared to sell securities in your state.

But banks must file updated financial information with their banking regulators. You'll find many reference materials containing information about companies.

You can also access commercial databases for more information about the company's history, management, products or services, revenues, and credit ratings. The SEC cannot recommend or endorse any particular research firm, its personnel, or its products. You will end up searching for the user so you can secure web connection is sufficient quantity and privacy of your Forex skills. Fortunately currencies like NZD RUB BRL CAD NOK New Zealand to the game is listed with extremely exciting and regularly check the ROI or returns are nonetheless just like profession and generous and our situations of market hours the most basic and core trend identific advisors can take advantageous because over-analyzing the market crashed in a big way.

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