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Microcap & Penny Stocks : OILEX (OLEX)
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To: Marty Rubin who wrote (2735)2/11/1998 10:43:00 AM
From: Prudent Investor  Read Replies (2) of 4276
 
To Marty and All:

I just read in today's Wall Street Journal (section c, page 9) these excerpts from the article entitled "SEC Approves Rules to Curb Microcap Fraud".

"The Securities and Exchange Commission approved new rules and proposed closing loopholes in regulations to curb proliferating fraud in 'microcap' stocks."

"Regulators have found frequent abuses of another rule--form S-8--that exempts companies from registering stock that has been set aside to pay consultants. The SEC found that companies have improperly given shares to individuals to promote the stock. Now regulators are proposing that brokers and consultants who promote the company's stock can't receive shares as compensation. When companies give stock to other individuals, the SEC wants to require them to disclose the recipients and the purpose for which they received the shares."

"Finally, the SEC approved new rules that tighten Regulation S, which covers unregistered securities sold at a discount to foreign investors. Under the new rules, the shares must be held for at least a year and companies must keep detailed records on the ownership and sales of the Regulation S shares. A typical 'REG. S fraud' involves U.S. brokers and promoters selling shares to nominee foreign accounts and skimming profits by selling the discounted shares in the U.S. after 40 days, the previous holding period."

Do any of these abuses sound familiar to anyone out there?

Gee, what will the Baron-Marneys and the Allen Joneses do now? More importantly, what will the beneficiaries of the REG S convertible debentures (that we have come to know and love) do? Will they actually have to go about "making money the old fashioned way-earning it"?

Could it be that certain people/entities involved with Oilex could have anticipated/been aware of the impending changes in the rules and that is why there was such a rush to issue the flood of REG S convertible debentures? Just wondering.

P.I.
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