Investing 101 - May 2, 2005 - Printable Version
- Pink Sheets CEO Calls for Reform in OTC Stock Market
by Mark Faulk "I am writing to alert you of a very important rule change that is needed to improve the marketplace in your company's stock. I need your help to make regulators turn on the lights and protect investors from the menace of hidden short selling in the OTC market.
And I hope that, after reading this letter, you will take the time today -- or as soon as you can -- to contact the SEC and voice your support for this needed rule change."
So begins an open letter from R. Cromwell Coulson, Chairman and CEO of the Pink Sheets, in which he joins the fight against corruption in the stock market by calling for OTC companies and their shareholders to petition the SEC and NASD to change short selling disclosure rules to include OTC and pink sheet stocks. He has asked companies and investors to send an email or letter to the SEC and NASD and "voice your support to the SEC for the Pink Sheets' Request for Rulemaking Regarding Member Records of 'Short' Positions and Reporting and Public Dissemination."
In the letter, which was issued today, Coulson says, "As Chairman & CEO of the Pink Sheets, I know perhaps better than anyone the importance of improving the Pink Sheets and OTCBB trading. And I know the devastating impact that small companies face when their market is tarnished by the threat of manipulation.
There is a crisis facing the OTC market today in the lack of short sale position reporting and disclosure for OTC issues. This lack of transparency regarding short selling in the OTC market allows fraudulent acts to go undiscovered and manipulative short sellers to hide.
I believe regulators should fix the problem. Small issuers traded on the Pink Sheets and the OTCBB deserve the same transparency and regulatory oversight of short selling as those listed on Exchanges or NASDAQ."
According to Coulson, "Pink Sheets has petitioned the SEC to cause the amendment of NASD Rule 3360 and require NASD broker dealers to maintain a record of total "short" positions in all customer and proprietary firm accounts in all publicly traded equity securities as well as report this information to the NASD for public dissemination of the short positions by security. The SEC's action is urgently needed to prevent fraudulent acts, expose market manipulation, promote fair principles of trade and protect investors."
In an interview with The Faulking Truth today, Coulson said, "Naked short selling is a contentious debate, but I think that anyone on either side of the issue will agree that greater transparency will help alleviate the problem, and those who don't agree are involved in the fraudulent activities themselves. A lot of companies claim to be victims of naked short selling. By turning on the lights through greater transparency, we will very quickly figure out which are and which aren't. The little companies deserve the same protection and transparency as the larger companies. This is a taint that SEC regulators can easily fix through better disclosure."
In his letter, Coulson said that "The only way to succeed in achieving this rule change is through the public outcry of corporate officers and investors demanding the SEC make this needed improvement to the OTC markets, and there is no substitute for your personal voice in this debate. This important rule change is not going to happen if you remain silent.
So please, don't rely on others to get the job done. Write your Emails or letters today. Together, we must win this battle and convince the SEC not to treat the OTC secondary markets for small companies as second class citizens.
Without this rule change your company, your shareholders and securities regulators will be blind to any short selling activity in your stock. The SEC needs to know that the lack of short sale information in your securities is unacceptable and demand they change NASD Rule 3360 immediately."
The Pink Sheets is a centralized quotation service that helps facilitate trading in OTC Bulletin Board and Pink Sheet stocks for broker dealers and investors by providing a real time quote system for the 8,000 companies listed on the OTC BB and Pink Sheets. Although it is not officially affiliated with the NASD, the NASD gets a fee from broker members for each share that is traded, even shares that are sold short and never purchased on the open market, a practice which advocates calling for reform in the stock market say is the equivalent of stock counterfeiting.
Coulson has asked companies to write a letter or email to the SEC and NASD on their company letterhead in support of amending NASD Rule 3360 to include OTC BB and Pink Sheet stocks, and to "please ask others in your company to comment to the SEC, and Email a copy of this letter to your major shareholders, your investment banker, and your trade association. Urge them to get involved, too. Every voice counts in the debate, and yours could be the one that puts us over the top."
You can read the Pink Sheets rule change request in it's entirety at: http://sec.gov/rules/petitions/petn4-500.pdf or http://sec.gov/rules/petitions.shtml
To voice your support to the SEC for the Pink Sheets' Request for Rulemaking Regarding Member Records of 'Short' Positions and Reporting and Public Dissemination (Request to amend NASD Rule 3360): rule-comments@sec.gov with a Cc: copy to:
pubcom@nasd.com
Mail your comments to:
Jonathan G. Katz
Secretary, Securities Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
With a copy to:
Barbara Z. Sweeney
Senior Vice President and Corporate Secretary, NASD
1735 K Street, NW
Washington DC 20006-1500
To comment to the SEC online, use rule-comments@sec.gov with a Cc: copy to: pubcom@nasd.com
To learn more about Pink Sheets, go to: http://www.pinksheets.com/
While we're on the topic of reforming the OTC market, here is an article from our archives that is worth another look:
"A Twelve Step Program to Clean up the OTC Stock Market"
http://www.faulkingtruth.com/article/?Investing101&1010
Add your name to our "Stockgate activist list" at info@faulkingtruth.com. We will email you only when we have new articles or information dealing with this issue. Please link the articles everywhere you can, post them on stock message boards, and send them to the appropriate public entities. To enact positive change requires positive action.
Voice your opinion on our message board (you don't have to sign up to post), or post in our guestbook.
Investing 101 Archives:
Financial Terrorism in America (Mark Faulk, Mar 19, 2004)
Pump and Dump or Short and Distort? (Mark Faulk, Apr 18, 2004)
Response From Berliner Freiverkehr and The Berlin-Bremen Stock Exchange (The Faulking Truth, Jun 3, 2004)
The Berlin Connection? SEC and NASD to Meet With German Brokerage Firm Tomorrow (Mark Faulk, Jun 3, 2004)
Is Dateline Losing Credibility Over StockGate Story Delays? (Mark Faulk, Jun 11, 2004)
Who's Looking Out For You? SEC Critics Seeking Investigation (Mark Faulk, Jun 27, 2004)
He Said, She Said: SEC, NASD At Odds Over Status of Proposal (Mark Faulk, Aug 5, 2004)
The Berlin Connection: 250 Companies Out (And Counting) (Mark Faulk, Aug 30, 2004)
Jag Media Case Dismissed by Judge, Citing Filing Deficiencies (Dave Patch, Sep 9, 2004)
A Twelve Step Program to Clean up the OTC Stock Market (Mark Faulk, Sep 14, 2004)
Is Time Running Short in StockGate Scandal? (Mark Faulk, Oct 5, 2004)
Dateline: The Waiting is the Hardest Part (Mark Faulk, Nov 16, 2004)
Death of an Investment Class (Dave Patch, Dec 30, 2004)
Elgindy Trial Illustrates Incompetence at the Federal Levels (Dave Patch, Jan 4, 2005)
The Year of the Investor (Mark Faulk, Jan 5, 2005)
Regulation SHO’s Threshold Lists Leave More Questions than Answers (Dave Patch, Jan 11, 2005)
Feeding the Stock Market Beast (Mark Faulk, Jan 11, 2005)
Economic Corruption US Style (Joel S. Hirschhorn, Feb 27, 2005)
Stockgate Goes to Congress (Mark Faulk, Mar 10, 2005)
The Old Shell Game (Bob O'Brien, Mar 25, 2005)
FINALLY! Dateline to Air Stockgate Segment April 10th (Mark Faulk, Mar 28, 2005)
Dateline Stockgate Update: POSTPONED YET AGAIN! (Mark Faulk, Apr 6, 2005)
Time to Boycott GE, Dateline, and NBC? (Mark Faulk, Apr 6, 2005)
Pink Sheets CEO Calls for Reform in OTC Stock Market (Mark Faulk, May 2, 2005)
National Counterfeit Conspiracy Days, June 6th and 7th! (Mark Faulk, May 15, 2005)
Ninety-Four Trade Days and Counting (Dave Patch, May 25, 2005)
Stockgate: Turning up the Heat (Mark Faulk, May 31, 2005)
Stockgate: Donaldson out......Cox in (Mark Faulk, Jun 2, 2005)
SEC's Donaldson out, Cox in: One Step Forward, Two Steps Back (Mark Faulk, Jun 13, 2005)
President Bush’s Social Security Agenda - Steal your Money the Easy Way (Dave Patch, Jun 17, 2005)
Global Links Corp: The Real Story (Mark Faulk, Jun 26, 2005)
Forget SEC "Regulations".... This is Good Old-Fashioned Fraud (Mark Faulk, Jul 13, 2005)
Common Cause Joins Fight to "Stop Corporate Takeover of the SEC" (Mark Faulk, Jul 22, 2005)
Dateline Stockgate: We're on, we're off, we're on, we're off.....WE'RE ON AGAIN: July 31st!!! (Mark Faulk, Jul 25, 2005)
Dateline to Air Stockgate Segment in 2-Hour Show, Sunday, July 31st (Mark Faulk, Jul 29, 2005)
From Dateline to Overstock....The Plot Thickens (Mark Faulk, Aug 16, 2005)
Congress Sells America Short (Mark Faulk, Sep 20, 2005)
Stockgate: The Big Picture (Mark Faulk, Oct 10, 2005)
Stockgate: Rallying the Troops (Mark Faulk, Oct 16, 2005)
The $10.5 Billion REFCO Smoking Gun? (Bob O'Brien, Oct 23, 2005)
We Definitely Aren't in Kansas Anymore - Fraud Wall Street Style (Bob O'Brien, Nov 3, 2005)
Start Spreading the News: Stockgate Goes Nationwide (Mark Faulk, Nov 8, 2005)
Stockgate: "Can We Talk?" (Mark Faulk, Nov 27, 2005)
It's Money That Matters (Mark Faulk, Dec 11, 2005)
Regulation SHO; Results Leave Questions More than Answers (Dave Patch, Dec 29, 2005)
Faulking Truth Editor to Write CMKX Story (The Faulking Truth, Jan 5, 2006)
It Takes an Army (Mark Faulk, Jan 11, 2006)
The Circle of Greed: The Only Bull in this Stock Market is a Cash Cow (Mark Faulk, Jan 17, 2006)
A Silent Lynch Mob - An Open Letter From Rod Young (Rodney Young, Feb 2, 2006)
The Circle of Greed: A Voice in the Wilderness (Mark Faulk, Feb 13, 2006)
The Circle of Greed: Who Wants to be a Congressman? (Mark Faulk, Feb 26, 2006)
Freedom of the Press? (Mark Faulk, Mar 12, 2006)
The Parallel Universe of the DTCC: “Bits and bytes in book-entry form.” (Mark Faulk, Mar 24, 2006)
Finally...the Truth About Patrick Byrne (An open letter to Colin Kelly, Jr.) (Mark Faulk, Apr 19, 2006)
Faulking Truth recommends abolishing the SEC (Mark Faulk, Apr 27, 2006)
The Circle of Greed: The Cloak of Invisibility (Mark Faulk, May 25, 2006)
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