The Securities and Exchange Commission suspended 17 microcap
stocks that trade on the over-the-counter market, citing questions
about the adequacy and accuracy of publicly disclosed
information.
"They may be called penny stocks, but victims of microcap fraud
can suffer devastating losses," said Robert Khuzami, director of
the SEC's division of enforcement. "The SEC's new Microcap Fraud
Working Group is targeting the insiders and promoters, as well as
the transfer agents, attorneys, auditors, broker-dealers, and other
gatekeepers who flourish in the shadows of this
less-than-transparent market."
The 17 companies suspended are American Pacific Rim Commerce
Group (APRM), Anywhere MD Inc. (ANWM), Calypso Wireless Inc.
(CLYW), Cascadia Investments Inc. (CDIV), CytoGenix Inc. (CYGX),
Emerging Healthcare Solutions Inc. (EHSO), Evolution Solar Corp.
(EVSO), Global Resource Corp. (GBRC), Go Solar USA Inc. (GSLO),
Kore Nutrition Inc. (KORE), Laidlaw Energy Group Inc. (LLEG), Mind
Technologies Inc. (METK), Montvale Technologies Inc. (IVVI), MSGI
Security Solutions Inc. (MSGI), Prime Star Group Inc. (PSGI), Solar
Park Initiatives Inc. (SOPV) and U.S. Oil & Gas Corp.
(USOG).
The trading suspensions result from a joint effort among several
SEC regional offices, its Office of Market Intelligence and the new
Microcap Fraud Working Group, which looks to detect fraud involving
microcap securities.
The SEC said stock-touting websites, twitter users and often
anonymous individuals posting to message boards have influenced the
investment decisions of the public, which often doesn't have
adequate information about the securities.
As an example, the SEC said Calypso Wireless hasn't filed
periodic reports since February 2008. In spite of this, the shares
rose to an intra-day high of 17 cents on Sept. 24, the same day a
stock-promoting website allegedly encouraged investors to continue
buying the stock. The stock traded at 4 cents on Sept. 21.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com