U.S. Securities and Exchange Commission on Monday said it has suspended trading in securities of 61 empty shell companies, that run the risk of being used by fraudsters as part of “pump and dump” schemes.
The Washingon, D.C.-based regulator said this move marks the second-largest trading suspension in agency history, and is part of a crackdown against the manipulation of microcap shell companies that lay dormant on the over-the-counter market.
The targeted companies are located in 17 states and one foreign company, which the regulator didn’t name. Here is a link to the list of the 61 suspended companies.
The SEC said the suspended companies are delinquent in their public filings and seemingly no longer in business, a conclusion that is based on an analysis of by the SEC’s Microcap Fraud Working Group.
Once trading is suspended, the companies are obligated to provide updated financial information to prove they’re still operational, essentially rendering them useless to scam artists now that they are no longer flying under the radar.
Through its Operation Shell Expel initiative, the SEC suspended trading in a record 379 companies in a single day last year.