WEST PALM BEACH, Florida, April 17, 2017 /PRNewswire/ --
Mention the term 'penny stocks' and people immediately fall into two camps; the speculators who embrace the extreme risk and the opponents who view these low-priced securities as tools for financial fraud. Interestingly, neither camp is incorrect.
The Securities & Exchange Commission (SEC) recently released a white paper that expounds on this topic. The SEC's white paper notes that the incidences and amount of negative returns, as well as alleged market manipulation, increase with the fewer disclosure-related requirements associated with penny stocks. Consequently, the white paper is rather negative towards OTC Markets securities.
The prevention of micro-cap fraud is, and will always be, a primary focus of the SEC and other securities regulators. In fact, the SEC will go to great lengths to investigate and ultimately prosecute micro-cap fraud. However, the white paper does not provide a balanced distinction to the higher OTCQX tier of OTC Markets. In fact, 'OTCQX' only appears twice in the entire white paper, both in a footnote that purports to list the OTCQX requirements, but fails to mention the quantitative requirements, including that the security not be a penny stock as defined by the federal securities laws.
The shortened 'QX' does appear 13 times in the white paper, providing some factual and statistical information such as market size and trading patterns, but again, ignores the significant distinction related to the penny stock definition.
According to both Bloomberg and Forbes, eight out of ten new businesses fail within 18 months and that number jumps to 96% in the first ten years. However, despite that failure rate, it is indisputable that entrepreneurs are needed in order to continue forming new businesses and access supportive capital so as to foster a healthy economy.
Further information on this and many other corporate finance topics can be found at LawCast.com.
Lawcast is derived from the term podcast and specifically refers to a series of news segments that explain the technical aspects of corporate finance and securities law. The accepted interpretation of lawcast is most commonly used when referring to LawCast.com, the securities law network. Example: "LawCast expounds on NASDAQ listing requirements."
Securities Attorney, Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size OTC and exchange traded issuers as well as private companies going public on the over-the-counter market, such as the OTCQB and OTCQX or an exchange such as NASDAQ or NYSE MKT. Legal & Compliance, LLC is a comprehensive corporate, securities and business transactions law firm assisting clients in all aspects of commerce, including initial public offerings, reverse mergers, registered public offerings, exempt private offerings, all forms of complex corporate finance transactions, compliance with national exchanges such as the NASDAQ and NYSE MKT and the over-the-counter market trading platforms such as OTCQB and OTCQX, compliance with FINRA and DTC, strategic planning for unique management and ownership issues, and broad-scope legal services. Laura Anthony, Esq. is an approved OTCQX Advisor (DAD/PAL). Laura Anthony, Esq., is also a contributing blogger to The Huffington Post the creator and author of SecuritiesLawBlog.com, ABA Journal's Top Blawg 100, and the producer and host of LawCast.com, The Securities Law Network. Attorney Laura Anthony is recognized by Martindale-Hubbel as one of America's Most Honored Professionals and the recipient of the Martindale-Hubbel Distinguished® Rating.
Laura Anthony, Esq.
Legal & Compliance, LLC
SOURCE Legal & Compliance, LLC