Quote:
Originally Posted by bluecar1
that is because you can only buy the PHRX stocks in the US, the reg S shares can be sold outside the US
that is the reason for the reg S shares.
no point having an international company if only US investors can invest
but reg S has been seen by many as having insufficient controls to prevent various types of fraud
correct me if i am wrong
peter
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We offer this disturbing thought. The federal securities laws, the very rules that were calculated to discourage deception and protect investors, provide a pair of mechanisms that fuel fraudulent stock schemes. Or, to put it slightly differently, securities laws that are designed to foster transparency and disclosure instead protect silence and deception.
One fundamental precept underlies our federal securities laws - investors must be given access to material information about public companies and the people who run and control them.
Yet two federal regulations not only ignore that mandate but tolerate secrecy.
What are these tools that can be used to distribute stock clandestinely to the four corners of the globe, conceal identities, launder funds, and defraud investors?
They are every con artist's dream and every law enforcement official's nightmare - and they share a common root, the letter "S." They are Regulation S, which allows U.S. public companies to sell stock overseas without registration, and Form S-8, which enables companies to register shares instantly.
When they were first enacted, these two regulations were relatively benign, but promoters and manipulators have discovered ways to utilize both Regulation S and Form S-8 to further illicit schemes.