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Microcap & Penny Stocks : DGIV-A-HOLICS...FAMILY CHIT CHAT ONLY!! -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus Long who wrote (28191)	10/3/1998 9:22:00 PM
From: paulmcg0	Read Replies (1) \| Respond to of 50264

Lazarus -- I'm going to lay out what I think was the scenario used to get DGIV on the OTC BB in 1996, instead of just giving bits and pieces of it, as in previous posts. (1) Digitcom hired a Houston law firm, Leibman & Oesch. As part of the SEC document said, "As a result of the foregoing arrangement, L&O may be deemed a "promoter" of the Company as that term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934." (2) There is a little known fact about the OTC Bulletin Board - the paperwork needed to get on the OTC BB is much less, if you use the so-called 15c2-11 "piggyback exemption" for a stock that is quoted elsewhere (i.e., the Pink Sheets for penny stocks, put out by the National Quotation Bureau). (3) L&O supplied a "shell" company called Ouzel Acquisition to Digitcom. This shell had minimal assets and liabilities. It was also majority owned (77.8%) by Mr. Leibman, one of the attorneys. (4) At the time of the events, neither Digitcom nor Ouzel was on the OTC BB. Ouzel, however, was in the Pink Sheets. That's why there is that mention of the 15c2-11 exemption in the SEC document. (5) Digitcom acquired Ouzel to take advantage of the 15c-211 exemption, instead of having to go through the full NASD form 211 process to get on the OTC BB. L&O did the necessary paperwork, and presto!, DGIV was on the OTC BB. To quote a security on the OTC BB, NASD rule 6740 requires that a market maker provide information to NASD, that includes among other things, the officers of the company being traded, its business, and a summary financial report. So, the MMs have a fair idea of what is going in the company. Of course, being the upstanding citizens they are, they would never, ever, use that information for their own advantage, would they? (Ok, I'm being sarcastic!)