SEC Suspends 225 Companies In Microcap-Fraud Crackdown

Law360, New York (February 3, 2014, 4:29 PM EST) -- The U.S Securities and Exchange Commission has suspended trading in 255 dormant shell companies, it announced Monday, the latest action in its “Operation Shell-Expel” microcap fraud-fighting initiative.

The SEC has targeted the suspended companies for their involvement in so-called “pump-and-dump” schemes, which are among the most common types of fraud involving microcap companies, according to the agency.

Microcap companies, which have a market capitalization of between $50 million and $300 million, are often thinly traded — meaning they have few interested buyers and sellers — and...
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