Canadian rules are soooooo lax it is really the wild west. SEC has got it right.Was in this stock for a long time but now out with a small loss
SEC halts purported PPE provider Micron
2020-05-27 18:53 ET - Street Wire
Also Street Wire (C-MWM) Micron Waste Technologies Inc (2)
by Mike Caswell
The U.S. Securities and Exchange Commission has halted Micron Waste Technologies Inc., a Vancouver company that claims to have a deal for the manufacture of face masks and other in-demand protective gear. The SEC says that there are questions about the accuracy of Micron's disclosure, in particular its deal to acquire an entity called Covid Technologies Inc. A halt is necessary for the protection of investors.
The halt notice comes about one month after Micron claimed that it was entering the market for personal protection equipment, or PPE for short. The company said that it would acquire Covid Technologies, a company supposedly capable of rapidly producing "key pieces" of gear. These included three-ply surgical masks and respirators. The news sent the stock (which had been trading between three and five cents on the Canadian Securities Exchange) to an 11-cent high on April 28, 2020.
Unfortunately for Micron, the news drew the attention of regulators, both in the United States and Canada. The stock trades primarily on the CSE, but it also has a U.S. listing on the OTC Pink, which is regulated by the SEC. In co-ordinated orders, both the SEC and the B.C. Securities Commission halted the stock, with the orders taking effect at the open on Wednesday, May 27.
The BCSC's halt notice was somewhat vague, simply citing information that "may cause or is likely to cause unusual fluctuations" in the price and volume of the stock. The SEC, however, left no doubt that the company's claims surrounding the Covid Technologies deal were the reason for the halt. The SEC says that there are questions about the present ability of Covid Technologies to rapidly manufacture PPE during the pandemic. For that reason, the SEC says that a halt is necessary.
It is not entirely clear why the regulators took over one month to halt the stock, but the halt notices came the day after a promotional video featuring former Global News anchor Steve Darling appeared on the Internet. The six-minute video is an interview with Covid Technologies president Harvey Sidhu, in which Mr. Sidhu claims that his company can make 100,000 three-ply masks and 40,000 N95 respirators per day. He also claims that he has many orders for the masks.
(The video was prepared by Proactive Investors, which has a website that touts many companies. There are clips of Mr. Darling interviewing officers and directors of mining stocks, cannabis stocks and tech stocks. Micron disclosed on Tuesday, before the halt, that it was paying Proactive $22,500 per month for a one-year period.)
The SEC halt is one of several that the regulator has issued against Canadian COVID-19 promotions. The most recent such halt was against Vancouver's WPD Pharmaceuticals Inc., which supposedly had a "breakthrough" COVID-19 drug candidate. The SEC said that there was enough doubt about those claims to halt the stock. Other Canadian stocks drawing COVID-19 halts include Vancouver's Roadman Investments Corp., former Saskatchewan cobalt explorer Bioelife Corp. and Toronto's Eastgate Biotech Corp.
The SEC's halt for Micron will last for 10 business days, or until June 9, 2020. Unlike halts in Canada, those issued by the SEC place an onerous burden on brokers wishing to trade the stock even after it resumes. They must keep up-to-date information on the company's financial status and on its insiders. They must also have copies of the company's prospectus, its most recent annual report and any subsequent quarterly reports. In addition, brokers must maintain current information on the company's name, address, state of incorporation, number of shares outstanding, the name of its transfer agent and the nature of its products. Brokers must also know if a price quotation is from another broker or from an insider. They must provide this information to anyone interested in trading the company