The Securities and Exchange Commission on Monday suspended trading in the securities of 61 empty shell companies that are delinquent in their public filings and seemingly no longer in business. The trading suspensions are part of an "Operation Shell Expel" initiative against the manipulation of microcap shell companies that are ripe for fraud as they lay dormant in the over-the-counter market, the SEC said, adding that the Federal Bureau of Investigation economic crimes unit assisted in the moves. The crackdown is the second largest in one day SEC history, and is dwarfed by suspensions against 379 issuers on May 14, 2012. The rationale behind the initiative is that "[s]ince microcap companies are thinly-traded, once they become dormant they have great potential to be hijacked by fraudsters who falsely hype the stock to portray it as a thriving company and coerce investors into 'pump-and-dump' schemes," the SEC said. On May 14, 2012, the SEC also issued an alert advising investors
↧