WASHINGTON (CN) – The SEC today suspended trading in 61 companies’ securities, many of them shell companies.
The SEC called the microcap companies “ripe for fraud as they lay dormant in the over-the-counter market.”
The companies are delinquent in public filings “and seemingly no longer in business based on an analysis by the SEC’s Microcap Fraud Working Group,” the SEC said in a statement.
“Since 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.
Empty shell companies are favorites for reverse merger scams, in which companies buy empty corporate shells to duck SEC registration requirements.
Many scams have been run that way from China in recent years.
It’s the second-largest trading suspension in one day, since last year, when the SEC suspended 379 companies for similar reasons.
Here is a link to the names of the 61 companies.
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