03 Jun SEC Suspends Trading in 61 Public Shell Companies

Caption: SEC Chair Mary Jo White

The SEC today announced that it was suspending the trading in 61 Pink Sheet traded shell companies from today through June 14, 2013. This is the second batch of suspensions, having done the same for 379 shell companies last year. The ill-advised name of the program: “shell expel.” These shells were chosen for suspension because they have provided no public information. In its announcement, the SEC acknowledged that it worked with the FBI on this project.

I am not the biggest fan of encouraging trading in companies, whether operating or shells, that provide absolutely no public information. OTC Markets, which owns the Pink Sheets trading platform, works hard to let you know how much information is available, going as far as to put a large skull and crossbones where there is none.

Therefore, as I wrote last year, while I’m all for free markets and the availability of shells for legitimate reverse mergers, suspending shells that do not reveal anything to the public is not something I’m going to lose any sleep over.