Pink Sheets is increasingly receiving complaints from the public regarding promotion of OTC securities via unsolicited junk email and faxes. Although spam itself is a problem on many fronts, we are particularly concerned about the negative effects on the OTC marketplace and the damage caused to investors' opinions of legitimate Pink Sheets companies.
We do not believe that sending unsolicited faxes or emails is a valid investor relations technique if it generates widespread complaints from aggravated receivers. We hope that you are as frustrated as we are at seeing the Pink Sheets name associated with the unsolicited emails and spam that fill your inboxes. This letter is intended to inform you of the steps we are taking to address this problem and how they may impact your company if its stock is the subject of this type of promotion.
Spam-oriented securities promoters may be paid by issuers or affiliates of the issuer, or increasingly, third parties that may or may not be known to the issuer. In most cases, the main goal of these securities promoters and those who finance them is to turn a quick profit when unsuspecting investors buy stocks based on unsupported or spurious claims.
Under the principle that transparency is the most effective form of investor protection, Pink Sheets is advocating the following strategies to expose spam promotion and questionable practices in the market for OTC securities:
SEC Rulemaking Pink Sheets is very pleased that the SEC has responded to our previous request for rulemaking and the issuer community's vocal comments to require the NASD to collect and publish broker-dealer short positions. We thank you for supporting this petition to the SEC and look forward to the increased transparency that will come from the rule being implemented in July.
To help bring transparency to spam promotion, we have recently proposed that the SEC adopt new rules requiring full disclosure of the identity, compensation and relationships of all participants (i.e., issuers, sponsors, third party promoters, etc.) directly or indirectly engaged in the promotion of stocks in the over-the-counter (OTC) market. We believe that our proposals will greatly improve the ability of investors to separate legitimate IR communications from dubious touts.
You can read the full text of our proposal online at http://sec.gov/rules/petitions/petn4-519.pdf and we encourage you to submit your comments to the SEC regarding this proposal. As we have proven with the short interest disclosure rule proposal, your voice can make a difference with regulators and help improve this market.
Blocking Dissemination of Quotes on Pink Sheets' Website We are also taking more direct and immediate action when it comes to the attention of Pink Sheets that a specific security is the subject of unsolicited spam promotion. We strongly believe that adequate current information should be publicly available during any period when a security is the subject of promotional activities that are encouraging trading, regardless of the source of the promotion.
It is Pink Sheets' policy that when we receive complaints of unsolicited spam promotions, we will block public access to quotations on www.pinksheets.com for the promoted security. Pink Sheets will not resume publication of quotations for such securities unless and until we receive a legal opinion, in form and substance acceptable to Pink Sheets, to the effect that adequate current information is publicly available concerning the issuer and the security and the information has been posted on the Pink Sheets News Service or filed with the SEC.
Although we understand that the issuer may not be involved with, or even have knowledge of, a spam campaign promoting its securities, Pink Sheets believes that the issuer has the responsibility to provide the type of information needed by investors to make reasonable investment decisions if promotion is occurring.
Pink Sheets encourages all issuers of OTC equity securities to make adequate current information available to the public markets. Pink Sheets believes that federal securities laws and state Blue Sky laws require issuers to provide adequate current public information when they are interacting with or promoting the trading market in their securities. With a view to encouraging compliance with these laws and improving the OTC market, we have published disclosure guidelines representing our views regarding the information that should be disclosed by issuers interacting with public trading markets. Pink Sheets also provides the Pink Sheets News Service for non-SEC reporting issuers to make their information publicly available. The guideline is available on Pink Sheets website at Disclosure Guidelines.
While helping to expose questionable practices such as manipulative short selling or unsolicited spam is important to improving your company's trading market, we are also focusing on providing a better home for hard-working small companies. As such we are very optimistic that the introduction of our new listing tiers will provide a way for issuers to provide quality disclosure in a cost efficient manner. OTCQX, which is designed for operating companies with audited financials, is now accepting applications from the top tier of OTCBB and Pink Sheets quoted companies. This fall, we will introduce Pink Sheets Emerging Equity List for companies that make current information available, but may not qualify for OTCQX. Pink Sheets will also continue to provide an efficient and transparent OTC quotation and trading venue for delisted, distressed, restructuring and reorganizing companies that may not be willing or able to qualify for any of our tiers.
If you have any questions about Pink Sheets' policy regarding promotion of OTC securities you are welcome to contact our Issuer Services Department at 212.896.4420 or by email at issuerservices*pinksheets.com.
Sincerely,
Cromwell Coulson, CEO Pink Sheets, LLC
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quote:It is Pink Sheets' policy that when we receive complaints of unsolicited spam promotions, we will block public access to quotations on www.pinksheets.com for the promoted security. Pink Sheets will not resume publication of quotations for such securities unless and until we receive a legal opinion, in form and substance acceptable to Pink Sheets, to the effect that adequate current information is publicly available concerning the issuer and the security and the information has been posted on the Pink Sheets News Service or filed with the SEC.
Although we understand that the issuer may not be involved with, or even have knowledge of, a spam campaign promoting its securities, [/i]Pink Sheets believes that the issuer has the responsibility[/i] to provide the type of information needed by investors to make reasonable investment decisions if promotion is occurring.
Gotta say, I am liking this guy more and more...
Nice find, good post, 'Mac
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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