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SEC Suspends Trading in 128 Dormant Shell Companies

Mar 2, 2015 • 4:02 PM EST
sec.png
1 MIN READ  •  By Michael Berger
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The Securities and Exchange Commission (SEC) announced that it has suspended trading in 128 inactive penny stock companies. The SEC did this to make sure that these shell companies don’t become used in pump-and-dump schemes. The suspension identified dormant shell companies in 24 states and Canada.

The trading suspensions are the latest in a microcap fraud-fighting initiative known as Operation Shell-Expel. This initiative started in 2012 and it has suspended trading in over 800 microcap stocks. The SEC Enforcement Division’s Office of Market Intelligence use its technology to identify dormant companies that can be abused. 

Once a stock has been suspended from trading, it cannot be relisted unless the company provides updated financial information to prove it’s actually operational.  It’s extremely rare for a company to fulfill this requirement, and the trading suspension makes the shells worthless and useless to scam artists. 

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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