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by Mike Caswell
The U.S. Securities and Exchange Commission has halted 128 inactive companies, including 19 Canadian-linked listings, as part of an operation to remove potential pump-and-dumps. The SEC says that the companies are all dormant and are ripe for abuse. Suspending them makes them useless to fraud artists.
The suspensions are contained in an order the SEC issued on Monday, March 2. The mass halts are part of something the regulator calls Operation Shell-Expel, in which it is seeking to remove dormant companies from the market. Most of the companies barely trade, but they could be taken over by those looking to run manipulation schemes or other types of market fraud.
The SEC's order does not mention that at least some of the companies it halted Monday were in previous pump-and-dump cases. One such company is Toronto pink sheets listing Cannon Exploration Inc. In a Jan. 14, 2011, complaint the SEC claimed that New York stock tout Christopher Wheeler used the company as part of a pump-and-dump scheme he ran through his touting website, OTCStockExchange.com. The regulator said that he sold $1.3-million worth of shares while predicting the stock could hit $10. (All figures are in U.S. dollars.)
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