September 8, 1989 |
Consumers lose about $2 billion a year investing in penny stocks, according to a 50-state survey of security regulators issued yesterday that concludes the industry is in the grip of con artists and organized crime. "The penny-stock industry increasingly is dominated by utterly worthless or highly dubious securities offerings that are systematically manipulated by repeat offenders of state and federal securities laws and other felons, some of whom have been identified as having ties to organized crime," concluded the report by the North American Securities Administrators Association.
April 12, 1991 |
The Securities and Exchange Commission, seeking to clamp down on the $2- billion-a-year fraud in penny stocks, proposed rules yesterday to protect investors in the securities. The proposed rules define a penny stock as one with a per-share sale price under $5, no regular daily reporting of closing prices, and no listing on a stock exchange or electronic price-quote system. The rules would require brokers to provide prospective buyers with documents outlining risks and explaining key market terms, monthly statements on the value of holdings, and an explanation of sales commissions.
February 9, 1989 |
The Securities and Exchange Commission moved yesterday to protect small investors from high-pressure sales tactics often used to promote penny stocks. The commission voted 5-0 to propose for comment a rule to require stockbrokers to obtain written approval from most clients before completing the sale of such stocks. Brokers also would have to make a documented decision that the penny stock was a suitable investment, given an individual's stated goals and financial assets. The proposal, which is subject to a 30- to-60-day period for public comment, would not apply to sales to regular customers.
July 13, 1990 |
The Securities and Exchange Commission yesterday sued Meyer Blinder, once a big trader in penny stocks, and his brokerage firm, Blinder, Robinson & Co. Inc., accusing them of a "fraudulent scheme" to deceive and overcharge clients. The suit, filed in U.S. District Court in Philadelphia, seeks repayment from the defendants of more than $20 million in what the SEC said was illegally obtained profits, as well as a permanent injunction prohibiting them from violations of securities laws.
September 10, 1990 |
It didn't take long for the sales force at the Center City branch of Shamrock Partners Ltd. to kick into high gear once it opened last summer to sell penny stocks. The telephone lines hummed in its office at 16th and Walnut Streets as rows of brokers sold cheap stocks in a handful of start-up companies. Then, on Aug. 2, 1989, two months after it opened, Shamrock closed its Center City office, leaving investors holding thousands of shares of stock that today have little value.
August 17, 1989 |
Stockbrokers who deal in low-price, often risky securities known as "penny stocks" must now obtain a customer's written approval before completing a sale. The rule, adopted yesterday by the Securities and Exchange Commission, comes in response to a dramatic rise in the fraudulent sale of penny stocks, which are usually not traded on exchanges or quoted on the National Association of Securities Dealers Automated Quotation (NASDAQ) System, known as the national over-the-counter market.
July 15, 2011 |
Want the lowdown on penny stocks? This week, Jeffrey DeBoer, president of DeBoer Financial Group in Roseville, Calif., gives his, er, two cents' worth on investing in penny stocks and answers a trivia question on crude oil. QUESTION: I've got a friend who's intrigued by penny stocks. He's invested in a number of tiny companies whose shares sell for next-to-nothing. As for returns, he's had some big winners and some losers. What's your take on penny stocks? Are they risky?
November 20, 2010 |
A Canadian man was sentenced in federal court yesterday to 25 years in prison in connection with a $55 million international stock-fraud conspiracy. George Georgiou, 40, of Milton, Ontario, was also ordered by U.S. District Judge Robert Kelly to make restitution of $55 million to victims, many of whom lost their retirement savings. Authorities said there were more than 1,900 victims who lost at least $1,000 each. It's not known how many, if any, lived in the Philadelphia region.
February 16, 1989 |
Con artists promising prizes, penny stocks and gold are bilking consumers out of more than $1 billion a year through deceptive telephone-sales practices, a coalition of business, consumer and government groups said yesterday. The coalition launched a campaign to increase public awareness of the fraud, urging consumers to exercise more caution and skepticism when dealing with telephone solicitations. "If it's too good to be true, if it sounds like a quick and easy deal, it's probably a fraud," said Ron Weber, president of the American Telemarketing Association, an industry group.
July 31, 1990 |
Federal prosecutors in Philadelphia yesterday charged two business consultants with duping 500 investors of more than $4 million in a scam involving penny stocks. James A. Laiacona, 44, of Stuart, Fla., and William A. MacKay, 47, of Old Brookville, N.Y., each were charged with one count of securities fraud and two counts of wire fraud in an alleged scheme that operated in Pennsylvania and two other states between April 1989 and March 1990. The charges, detailed in a felony information released yesterday, accuse Laiacona and MacKay of taking about $4.3 million from investors by fraudulently inducing them to invest in companies formed by reverse mergers between private companies and publicly traded shell corporations.