One last thing, Francois...
I did find it odd that you called the information I published on RB: Shorters Trash. In an effort to be fair, I thought I would publish my alleged "Shorters Trash" here as well. Enjoy...
Pump and Dump.
This technique is employed by those promoters and brokers who want to inflate the value of a stock, stimulate investor interest, and bail out of their own holdings. The former shell company, with its "exciting" new business, is an ideal candidate. In order to "pump" the value of the stock the company and its promoters will generate a series of positive press releases highlighting the merger and new developments and plans. Analysts may be paid to recommend the stock and brokers may tout the company?s future prospects, often in overinflated terms. If a brokerage firm has been instrumental in the merger (which is frequently the case) its brokers and cold callers will begin to solicit new investors by recommending the stock. As stock prices move upward based upon these "news items" inside stockholders dump their shares on an unsuspecting public. And who are these insiders? They can include the major inside stockholders and promoters who put the deal together, the analysts who recommend the stock, consultants who generate public interest and the former owners of the private company.
Recent efforts by the SEC have been directed at thwarting the "pump and dump." In particular, the SEC recently amended the rules governing the use of Form S-8 to register securities. Form S-8 is a short form of registration that contains little disclosure about the company. It was designed for use by companies in connection with the issuance of stock and options to employees. Over the years the definition of "employees" expanded to include consultants and outside contractors (like attorneys) who performed services for the company. In its recent amendments the SEC expressed concern that companies had used Form S-8 to register stock issued on a reverse-merger to "consultants," including promoters, finders, and their friends who are involved in conditioning the market for the company?s securities by promoting the stock. Those individuals sometimes make the registered shares available to brokers who are part of a "pump and dump" scheme. Under the amended rules, Form S-8 may not be used to register shares given to consultants for their work in connection with a capital raising transaction or their efforts, either directly or indirectly, to promote or maintain a market for the company?s securities. While this change may force the pump and dumpsters to be more creative, rest assured, such schemes will persist. Companies will continue to issue shares to consultants for services that remain permissible under S-8. Shell insiders may register shares before a reverse-merger to assure a ready supply. They will also take advantage of Rule 144 which permits certain sales of unregistered stock after a one-year holding period. If all else fails you can expect that serious scamsters will simply ignore the S-8 amendments, register the shares issued to "consultants" and disappear from the scene leaving the company and its new management to face the regulatory music.
stockpatrol.com
Note to thread: does any of this sound familiar?
Diz- |
