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Microcap & Penny Stocks : Corporate Vision (CVIA) -- Ignore unavailable to you. Want to Upgrade?

To: D LEE who wrote (1984)	2/28/1998 11:18:00 AM
From: Ricardo A. Biondi	Respond to of 6654

To All, I found this on other thread regarding Reg. S: Turning up the heat on scamsters The bull market has brought with it a rash of small cap frauds. Now the SEC wants to strike back By Michael Brush Charges by the U.S. District Attorney's office in Manhattan on Wednesday that New York Stock Exchange (NYSE) floor brokers used their knowledge of pending orders to get an edge in the market have given the squeaky-clean Big Board a black eye. But while the spotlight is on the NYSE, don't forget that retail investors are much more likely to get ripped off in the small cap arena. That's partly because microcap stocks tend to be thinly traded on the National Association of Securities Dealers (NASD) Over the Counter Bulletin Board or in the "pink sheets," so called for the color of the pages used to list them by the National Quotation Bureau. Thinly traded stocks are more easily manipulated by unscrupulous brokers who talk them up only to dump their own position on hapless investors. Another roblem is the lack of information on microcap stocks. The Securities Exchange Commission (SEC) says that these factors, plus the booming markets, have contributed to a sharp upturn in microcap fraud that involves millions of dollars. Now it wants to close down some of the loopholes commonly used by small-cap fraudsters. Here's what they have in mind, scary bureaucratic language and all. * The S-8 Scamsters: The SEC originally created "S-8" forms to give companies a quick way to register shares used to compensate employees. No messy prospectus needed because the SEC figures that employees already know about their company. Then in 1990, the SEC decided to let companies use the form to register shares meant for paying consultants, as well. Voila! A loophole was born. Scamsters quickly figured out that companies could use this route to register shares for "consultants" whose only real "service" was to turn around and sell those shares to the public. In other words, they found a way to get new shares in the market without having to file a new prospectus. The SEC has proposed a change that would shut down the use of this form for shares that go to "consultants" who are really brokers in disguise. To keep track of things, it also wants a list of the names of any "consultants" who get shares through the use of this EZ registration form. * Regulation S Shenanigans: "Reg. S" lets companies avoid registering shares with the SEC, as long as those shares are to be sold offshore. After all, reasons the SEC, if the stock is going to another country, let them worry about it. Problem is, some brokers have been abusing this rule by bringing these shares back into the U.S. markets. The SEC wants to make "Reg. S" securities like any other restricted securities, meaning that they can't be resold in the U.S. without being registered. * The Rule 15c2-11 Fake Out: Here's another clever trick used by microcap rip-off artists. When hyping a small cap stock, they like to have quotes from several market makers, implying that the stock is well followed. Problem is, a lot of market makers who publish quotes don't know the first darn thing about the stock. How can this be? As things stand now under this rule, market makers in bulletin board or pink sheet stocks have to look over the basics of the company at least once a year, already a pretty low standard. But once their quote has been out for 30 days, other market makers can "piggyback" -- by publishing the same number, even if they can't prove that they know anything about the company. The SEC wants to make the "piggyback" market makers check up on the company once a year, too, before they offer quotes. What's more, it wants to up the standard when it comes to how much they have to know about the company. Does all this sound too complicated? For more basic stuff on how to avoid getting ripped off in the stock markets, check out the SEC's "Facts on Saving and Investing Campaign," a series of town hall meetings and seminars to take place between March 29 and April 4. The SEC also has several free publications about investing fraud. For more information, visit the SEC's Web site, or call 800-SEC-0330

To: D LEE who wrote (1984)	2/28/1998 2:00:00 PM
From: paulbk	Read Replies (3) \| Respond to of 6654

Dave, I disagree with your statement"-The Feedback from these people has been extremely generous." We still know nothing about this reg-s deal which is now eligible for conversion. We don't know what the share count is or the float. The excuse for not filing is lame IMO because if they are savvy enough to put together a reg-s deal they're savvy enough to know what the SEC rules are. All I've seen so far is a string of vague press releases and a surprise reg-s filing. In my view, the common shareholders have been the generous ones as they've sup- ported cvia by purchasing the stock at this stage of the game and they are entitled to some basic information about what's going on. regards,p.b.