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Microcap & Penny Stocks : NAMX -- North American Expl.-- Que Sera Sera! -- Ignore unavailable to you. Want to Upgrade?

To: Sidney Reilly who wrote (2627)	2/11/1998 10:54:00 PM
From: Sidney Reilly	Respond to of 4736

SEC Chairman Levitt Wants OTC-BB to Dump Non-Reporting Stocks 2/9/98 15:19 Los Angeles, Feb. 9 (Bloomberg) -- Securities and Exchange Chairman Arthur Levitt wants Nasdaq's OTC-Bulletin Board to dump thousands of small-company stocks unless those companies start filing financial reports with the SEC. Levitt threw his support behind a rule approved in December by the National Association of Securities Dealers that would force more than 3,000 companies off the Nasdaq Stock Market's over-the-counter listing service. The Bulletin Board has been plagued by stock manipulation in recent years. ''If they don't register with the Commission, they shouldn't be allowed to trade there,'' said Levitt. The SEC, he said, also is setting up a special unit to fight fraudulent trading in shares of very small companies. Currently, there are no listing requirements for inclusion on the Bulletin Board, which posts real-time quotes, last sale prices and volume information for what are mostly stocks that sell for less than $5 a share. Trades can be placed only over the telephone. If the Bulletin Board stops listing companies that don't file financial reports with the SEC, it would affect about half the roughly 6,500 companies that currently trade on the Bulletin Board. Levitt's backing suggests the SEC will likely approve the NASD rules. NASD is accepting public comment on the proposal until Feb. 16, after which a plan will be submitted to the SEC for approval. In an interview, Levitt expressed concern that price quotes on Bulletin Board stocks are indistinguishable from those for companies that meet far more rigorous listing requirements for the Nasdaq Stock Market. Investors have often confused the loosely regulated Bulletin Board with Nasdaq, which lists many giants such as Microsoft Corp. and Intel Corp. Nasdaq runs the Bulletin Board but does not regulate it. Ban Seen by Summer ''I think the Bulletin Board has a level of acceptance thatit should not have,'' Levitt said. The Bulletin Board's ban on non-reporting companies could come by the summer, said Mary Schapiro, president of the regulatory unit of NASD, an industry association that runs Nasdaq and polices all U.S. brokers. ''You cannot expect investors to invest in your company if you are not providing current financial information,'' she said. ''I think it's as simple as that.'' Investors who own shares in non-reporting companies now traded on the Bulletin Board will have a harder time selling their shares once the new rule is passed, Schapiro said. Levitt and Schapiro spoke about the Bulletin Board in separate interviews with Bloomberg News. B.A.T. Could Be Banned Among the Bulletin Board companies that could face delisting under the proposal is B.A.T. International, one of the most rapidly growing stocks of 1998. The stock, which sold for just 8 cents a share on Dec. 31, has soared to about $1.65. It tripled last week, in active trading of 60.2 million shares. Investors are excited about B.A.T. International's claim to have developed a secret new engine that can get over 100 miles per gallon. The Burbank, California-based company has never filed a report with the SEC. It had just $5 in cash on Dec. 31, 1996,the date of its most current balance sheet, which revealed a negative net worth of $229,847. Yet B.A.T. International's 69 million outstanding shares commanded a market value of $224 million at its high of $2.25 on Thursday. In recent trading, B.A.T. shares rose 10.5 cents to $1.73. Under the proposed NASD rule, non-reporting companies like B.A.T. International would have to move from the Bulletin Board to the Pink Sheets, a privately operated listing of small company stocks that posts less timely quotes. ''They should go the Pink Sheets which, for whatever reason, have a lower level of public acceptance,'' said Levitt. He also expressed support for a proposed NASD rule to require brokers to review the current financial statements of any unlisted security before recommending it to a client. B.A.T.'s chief executive, Joseph LaStella, said he intends to begin filing financial information with the SEC in the near future, which would let the company remain on the Bulletin Board after the rule change. --David Evans in Los Angeles (310) 827-2348 through the Washington newsroom (202) 624-1820/bd