May 20, 2004
Sure, Continue to go after the micro-cap companies. Continue to manifest ways to harass their operations and continue to attempt to shut them down. The message is not lost in this proposal that the SEC is trying desperatly to humiliate and harass small compaies and shells in an effort to diffuse from the real issue at hand. Stock Manipulation by the Industry itself.
The issuance of shares for payment of services using S-8s is not the best of circumstances. Shareholders are typically the last to know and their investments are hampered before they have any opportunities to react. Shutting this means down, however, without identifying a low cost alternative serves no function. I would also be negligent to not remind the SEC that the lack of settlement failure and short position disclosure to shareholders has a far more damaging impact on their investment.
The SEC is being sued for Harassment at this time based on their lack of concern and their lack of protection against industry wide abuses to the micro-cap industry. The SEC, in reacting to such claims and allegations, has continued to pump out reform packages that, on the surface anyway, appear to be just that - Harassing. This particular one addresses the perils of Shell Companies yet the SEC has taken on little to no responsibility for their part in creating many of these Shell Companies. That being their lack of protecting to these small start up companies from the cannibalism of the Wall Street System.
I am all for cleaning up the Micro-Cap Industry. To do so, the SEC needs to put the industry on a level playing field with protections from both sides of the abuse table. Pump and Dumps exist. We all are aware of it. The SEC takes a vigil to go after all of these opportunities and routinely audits the trading records of Companies who suddenly run up in stock value for no apparent reason. The SEC rarely, if ever, audits the trading records of these same securities when the stock plummets dramatically to determine whether the trades that drove these stocks down ever settled within normal time constraints and who was benefitting from the sell side. the SEC is blinded to Insider Manipulation only leaving a gaping hole for the industry to step in and manipulate at will.
Short and Distort is an attack on small companies that drive the stock price down and diminish the opportunities for the companies to pick themselves back up. These companies find it far more difficult to obtain a growing customer base as potential prospects show concern about the long term viability of the company based on its stock values. Other Customers will sign contracts under terms of confidentiality in disclosure so as to not be associated publicly with these smaller firms. These all lead to the creation of a Shell from a once operating business.
The SEC cannot consider itself immune from the blame of the situation as it stands today. The SEC has neglected the small business in order to insure a revenue haven for Wall Street. The SEC demonstrates their conflicts in ethics as they will easily remove the executives from OTCBB Companies due to allegations of impropriety for ill gotten profiteering and yet the SEC has never once taken similar actions against our Wall Street Executives who operate firms riddled with fraud and deceipt and who reap in the benefits of the revenue generated by this fraud by receiving 8 figure salaries.
The SEC needs to be transparent itself and then maybe they can cast shadows on other related industries. Go ahead and close down the S-8 Registration but find an alternative that also works for these companies. They are not getting the protection of the Blue Chip stocks so why would they have to follow the Blue Chip rules. The SEC has forgotten the basic principles of Equal rights under the Law