I suggest you go to the Talk : Overvalued: One Big Scam? CTRN, ECTS, IVHD, SMEK & MALB board and the USAT boards and read the posts going back one week. We not only cause the halt but also did the research to cause it. After reading please come back and bow down before the great and powerful Mr. Floyd. It is the story of the year and a one day SEC trading halt record. To bad for you PRFM is my project for the weekend.
R.I.Pieces
floyd
SEC Suspends Trading in Securities of 6 Companies
Washington, Jan. 29 (Bloomberg) -- The U.S. Securities and Exchange Commission suspended trading in the shares of six companies after several racked up big market gains while claiming to do business on the Internet.
Citron Inc., Electronic Transfer Associates Inc., and USA Talks.com Inc. -- three of the companies suspended -- have advertised their links to the Internet and electronic commerce. Not surprisingly, all three stocks at least tripled earlier this month.
However, the SEC ordered trading suspended after finding that the public lacked adequate or accurate information on these stocks. The suspensions underscore the potential for fraud when a sector such as the Internet captivates investors, said William McLucas, a former director of the SEC's enforcement division.
''This is a very, very, active and, I would argue, sensitive market,'' said McLucas, who now works for the law firm Wilmer Cutler & Pickering. ''The volume and price movements in these securities are such that they present opportunities for con artists.''
The SEC issues trading suspensions, which generally last for 10 business days, in order to warn investors and provide time for adequate information on the company in question to reach the market. Such orders can be costly to people who have already invested because their shares often decline sharply once the suspension expires.
A highly visible example of such losses occurred at Systems of Excellence Inc., a Coral Gables, Florida, manufacturer of video conferencing systems that filed for bankruptcy in March, 1997. Its shares fell 58 percent -- to 1/2 from 1 13/64 -- following an SEC trading suspension in October, 1996.
''What you are telling me is not good news,'' said Manuel Cruze, a Miami accountant who said he spent about $150,000 to purchase 5,000 Citron shares that are now worth about $90,000. ''A two-week stop is not good at all.''
In regard to today's suspensions, the SEC said that questions have been raised about the accuracy and adequacy of information on the prospects and future earnings of Citron, a Denver-based Internet marketing company. The agency issued a similar statement in the case of Electronic Transfer Associates, described in the release as a Colorado Internet-related sales company.
''The likelihood is these are issues (stocks) that the agency believes are being manipulated,'' McLucas said. The suspensions ''put the market on notice that there are serious questions about the information in the marketplace.''
The lack of information hasn't prevented investors from bidding up these stocks. USA Talks.com, a La Jolla, California, Internet telephony company, has seen its shares trade as high as 63 7/8 this month after closing at 13 1/2 on Dec. 31, 1998; Citron shares, now at 18, traded as high as 42 earlier this month after ending the year at 4 1/8.
Now that the SEC has issued the suspension, securities firms that make markets in the stocks cannot resume quoting prices until they have reviewed financial information on the companies in question. In many cases, market makers simply choose to drop the stocks in question, said Cromwell Coulson, an official at the National Quotation Bureau.
SEC officials declined further comment on the suspensions, which were released at separate times. The agency initially issued an order for USA Talks.com and later in the day announced the suspension of a group of five stocks, including Electronic Transfer; Citron; Smartek Inc.; Invest Holdings Group Inc.; and Polus Inc.
None of the five companies that were grouped together have filed registration statements for their stock with the SEC. MSNBC reported yesterday that four of the five companies -- excluding Invest -- are linked to a disbarred former stockbroker named Peter C. Tosto.
Tosto was listed as a promoter for Smartek in a 1997 private placement notice on file at the SEC. Steven Kaplan, a New York- based attorney who represents Tosto, declined comment.
''Citron is looking into everything,'' said Kaplan, who works at the firm Loselle Greenawalt Kaplan & Blair. A spokesman for these companies couldn't be reached for comment.
17:15:46 01/29/1999 |
