Penny Stocks Are Perfect for Manipulation
About OTC:BB http://www.otcbb.com/
The OTC Bulletin Board (OTC:BB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. An OTC equity security generally is any equity that is not listed or traded on Nasdaq or a national securities exchange. OTC:BB securities include national, regional, and foreign equity issues, warrants, units, American Depositary Receipts (ADRs), and Direct Participation Programs (DPPs).
word of caution is in order here about Penny stocks and Pink Sheets. These are very risky stocks and many times the information that you hear comes from those individuals that already hold a large amount of these stocks and are waiting to sell as you are buying.
Also, many Penny stocks have low volumes which can make it hard to get out of a position when you want to.
It is important to note that the NASD has no regulatory authority over OTC Bulletin Board issuers. The NASD’s responsibilities include establishing rules governing its broker/dealer members’ business conduct; setting qualification standards for securities industry professionals; examining members for their financial and operational condition as well as their compliance with appropriate rules and regulations; investigating alleged violations of securities laws; disciplining violators of applicable rules and regulations; and responding to inquiries and complaints from investors and members.
Due to the high level of risk involved in investing in Penny Stocks, the SEC created Rule 15g-2, which makes it “unlawful for a broker or dealer to effect a transaction in any penny stock for or with the account of a customer unless, prior to effecting such transaction, the broker or dealer has furnished to the customer a document containing the information set forth in Schedule 15G, Rule 15g-100, and has obtained from the customer a manually signed and dated written acknowledgement of receipt of the document.” (SEC Rule 15g-2(a), Risk Disclosure Document Relating to the Penny Stock Market).