Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Post messages here which regulators should read -- Ignore unavailable to you. Want to Upgrade?

To: jjs64 who wrote (2)	11/13/2003 4:26:14 PM
From: StockDung	Read Replies (1) \| Respond to of 15

"Investors in penny stocks are believed to lose all or some of their investment 70% of the time. Some authorities believe that the presence of fraud in that market may push the figure up to 90%." ================================ sos.state.il.us Illinois Securities Department: Penny Stocks Investors in penny stocks are believed to lose all or some of their investment 70% of the time. Some authorities believe that the presence of fraud in that market may push the figure up to 90%. Eight years ago, 55 penny stock firms were headquartered in just six states. Today an estimated 325 penny stock firms have set up main offices in 29 states, employing several thousand brokers at more than 1,000 branch offices that now reach into America's smallest communities. One of the most notorious penny stock firms of the 1980's was First Jersey Securities. That firm was closed by the SEC in 1987 and its founder and chairman, Robert Brennan, was ordered to pay $71.5 million for defrauding clients in a manipulation scheme. The SEC charged that the firm created an artificial demand for the securities of six companies because First Jersey was orchestrating both the buying and selling of the securities. The federal court judge noted that the proven scheme was probably only the tip of the iceberg, as First Jersey had over 500,000 customer accounts and a sales force of 1,200 brokers during its heydey in the mid 1980's. The judge described the scheme in detail and noted that Mr. Brennan was "completely without remorse."