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U.S. regulator cracks down on OTC marijuana stocks (FSPM) (PHOT) (PTOG)

Stockhouse Editorial
5 Comments| May 16, 2014


The U.S. Securities and Exchange Commission is cautioning investors about the potential for fraud in microcap companies that claim that their operations relate to the marijuana industry.

The move comes after the U.S. regulator suspended trading in Denver-based FusionPharm Inc. (OTO: FSPM, Stock Forum), which claims to make a professional cultivation systems for use by cannabis cultivators among others.

It is the fifth company in the marijuana space to be suspended in the past two months.

The others included Cannabusiness Group Inc. (OTO: CBGI, Stock Forum), Woodland Hills, California-based GrowLife Inc. (OTO: PHOT, Stock Forum), Colorado Springs-based Advanced Cannabis Solutions Inc. (OTO: CANN, Stock Forum), and Bedford, Texas-based Petrotech Oil and Gas. (OTO: PTOG, Stock Forum).

Under U.S. federal securities laws, the SEC can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.

“Recent changes in state laws concerning medical and recreational marijuana have created new opportunities for penny stock fraud,’’ said Elisha Frank, co-chair of the SEC Enforcement Division’s Microcap Fraud Task Force.

“Wherever we see incomplete or misleading disclosures, we act quickly to protect investors.’’

Prior to the May 15 suspension, Fusion Pharm had seen its stock price soar to $9.20  from under 10 cents, leaving the company with a market cap of $23.2 million, based on 8 million shares outstanding.


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Comments

Moneymagnet14
Here's something completely different to what anyone else has been doing in the space, other than GWPharma a 1.2 dollar market cap company. http://www.cannabis-tech.com/s/home.asp
2 stars
May 16, 2014
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antonaki1
Stick to Canadian MMJ's where the industry is federally legal. The U.S. is not federally legal, only certain states legal. Too much risk in U.S.
2.5 stars
May 16, 2014
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Boug1234
Thank you Canada
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May 16, 2014
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SlyLupp
From 0.10 to 9.20 thats a whole lot of No brainer.
3.5 stars
May 16, 2014
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jaberwock
FITX has to be next
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May 16, 2014
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