SEC suspends trading in 128 companies

By Staff | March 2, 2015 | Last updated on March 2, 2015
2 min read

The U.S. Securities and Exchange Commission has suspended trading in 128 inactive penny stock companies to ensure they don’t become sources for pump-and-dump schemes.

SEC says the trading suspensions are the latest in a microcap fraud-fighting initiative known as “Operation Shell-Expel,” which is being led by the SEC Enforcement Division’s Office of Market Intelligence. One of this office’s aims is to prevent fraudsters from having the opportunity to manipulate thinly traded stocks.

Read: SEC charges two Canadians with penny stock fraud

Since it began in 2012, the operation has resulted in trading suspensions of more than 800 microcap stocks, which comprises more than 8% of the over-the-counter market. Once a stock has been suspended from trading, says SEC, it can’t be relisted until the company provides updated financial information to prove it’s currently operational—it’s extremely rare for a company to fulfill this requirement.

“We are getting increasingly […] adept at ridding the microcap marketplace of dormant shells within a year of the companies becoming inactive,” says Andrew J. Ceresney, director of the SEC Enforcement Division. Today’s trading suspension identifies dormant shell companies both in Canada and in 24 U.S. states.

The operation is being led by William Hankins, Margaret Cain, Robert Bernstein, Victoria Adraktas, LaVerne Patterson, Jessica P. Regan, Leigh Barrett, and John Gibbons in the Office of Market Intelligence. They’re receiving assistance from the Enforcement Division’s Delinquent Filings Group, and from the FBI’s Economic Crimes Unit.

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