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Microcap & Penny Stocks : Zia Sun(zsun) -- Ignore unavailable to you. Want to Upgrade?

To: StockDung who wrote (7939)	5/20/2000 1:52:00 PM
From: who cares?	Respond to of 10354

Bahahaaaaaa. That is "perthetically" funny. So now Senor Cragoon feels he has the right to limit who you can talk to and what you can say, as well as what you can cut and paste from the SEC website, even when it refers to him in no way whatsoever. That is unless of course he's a Reg S stock Fraudster. Only if that's the case would he need feel threatened by your post of an SEC article . That goes without saying of course, is in my opinion, an opinion i'm allowed to have and express thanks to the wonderful Constitution of the United States. The same Constitution that gives others the right to file crappy frivolous lawsuits. sec.gov Microcap fraud depends on spreading false information. Here's how some fraudsters carry out their scams: Questionable Press Releases Fraudsters often issue press releases that contain exaggerations or lies about the microcap company's sales, acquisitions, revenue projections, or new products or services. Paid Promoters Some microcap companies pay stock promoters to recommend or "tout" the microcap stock in supposedly independent and unbiased investment newsletters, research reports, or radio and television shows. The federal securities laws require the newsletters to disclose who paid them, the amount, and the type of payment. But many fraudsters fail to do so and mislead investors into believing they are receiving independent advice. Internet Fraud Fraudsters often distribute junk e-mail or "spam" over the Internet to spread false information quickly and cheaply about a microcap company to thousands of potential investors. They also use aliases on Internet bulletin boards and chat rooms to hide their identities and post messages urging investors to buy stock in microcap companies based on supposedly "inside" information about impending developments at the companies. For more information about Internet fraud and on-line investing, read Internet Fraud and What You Need to Know About Trading in Fast Moving Markets. "Boiler Rooms" and Cold Calling Dishonest brokers set up "boiler rooms" where a small army of high-pressure salespeople use banks of telephones to make cold calls to as many potential investors as possible. These strangers hound investors to buy "house stocks" ? stocks that the firm buys or sells as a market maker or has in its inventory. To learn more about cold calling, read Cold Calling Alert. Microcap fraud schemes can take a variety of forms. Here's a description of the two most common schemes: The Classic "Pump and Dump" Scheme It's common to see messages posted on the Internet that urge readers to buy a stock quickly or to sell before the price goes down, or a telemarketer will call using the same sort of pitch. Often the promoters will claim to have "inside" information about an impending development or to use an "infallible" combination of economic and stock market data to pick stocks. In reality, they may be company insiders or paid promoters who stand to gain by selling their shares after the stock price is pumped up by the buying frenzy they create. Once these fraudsters sell their shares and stop hyping the stock, the price typically falls, and investors lose their money. The Off-Shore Scam Under a rule known as "Regulation S," companies do not have to register stock they sell outside the United States to foreign or "off-shore" investors. In the typical off-shore scam, an unscrupulous microcap company sells unregistered Reg S stock at a deep discount to fraudsters posing as foreign investors. These fraudsters then sell the stock to U.S. investors at inflated prices, pocketing huge profits which they share with the microcap company insiders. The flood of unregistered stock into the U.S. eventually causes the price to plummet, leaving unsuspecting U.S. investors with enormous losses. The SEC recently strengthened Reg S to make these frauds harder to conduct. Mr. Burns (Check the cover of the latest Forbes ASAP for my cheerful countenance)