Monday, March 2, 2015

"SEC Suspends Trading in 128 Dormant Shell Companies"

Long time readers know this part of the market holds a sick intrigue for your correspondent.*
From FT Alphaville:

Slaughter of the shells
Officials from the SEC have been out with axes and clubs across 24 states and also Canada, effectively putting 128 inactive penny dreadfuls or Pink Sheets out of their corporate misery.

Trading suspensions on Monday brought the number of micro cap companies suspended since the regulator began Operation Shell-Expel in 2012 to 800 — some 8 per cent of the OTC market, where all these previously traded.

The idea, of course, is to clear away those market vehicles that might be used in pump and dump operations. Once an OTC stock has been suspended, it can’t come back without a proper financial and operational update, and that rarely happens. So trading halts like these tend to be terminal....MORE
Way back in 2008 I recited some of the history:

Chameleons on the Pink Sheets
On April 22 I was rambling about Planktos and penny stock deals:

...A classic history would be a Vancouver "junior resource" company in 1979, after the collapse of the oil and gold markets became a solar deal in '81 , an Aloe Vera deal to the yuppies mid '80's, a biotech in '86 ("we're the next Amgen"or "A cure for AIDS"), then on to neutraceuticals or spas, Indian casinos, software, then the great "i", "e-" and ".com" gold rush. Someday I'll get around to checking if some lunatic scammer actually went with "".

The next group of parasites were the "homeland security" companies, then land deals. The "resource" scams never went away and became more prominent in 2002 after gold had moved off its $252 bear market low. We're in the Green boom (happy Earth day by the way) now, who knows what's next....

Today in EuroInvestor:

...The recently re-named Homeland Security Network, Inc. (Pink Sheets:HYSN), doing business as Global Ecology Corporation (GEC) announced today that it has received their initial order from its soil remediation project in Juarez, Mexico. The total value of the purchase orders, involving several of the partnerships soil-based products, is $2 million with delivery to begin this June....
See also:
London's Russian IPO's
Junior Gold Miners Consider Cashing Out, Pursuing Medicinal Marijuana Opportunities
SEC Approves Eight Russian Shell Companies (AMOK.OB)
Better Get The Leg Irons Boys.
These Ain't Regular Criminals,
These is Stockbrokers.
-One of Climateer's favorite Barron's headlines.
Oh happy day.
Long time readers know I have a morbid fascination* with the underbelly of the markets; it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away.

As they say on the nature shows:
"Sadly now, there can be but one outcome"... 
The Law Firm That Supplies Shell Companies To Oligarchs, Money Launderers, and Dictators
A Look at the Old Shell Game: Reverse Mergers From China and Russia (CGA; SGAS; QING; AGVO; AMOK)
Tax Havens--"Kenya: want a shell company? No question"
Money Laundering With Inga Slavska and the Sinaloa Cartel