The Securities and Exchange Commission has been issuing a flurry of trading suspensions. The Wall Street Journal of February 2, 2005, describes the suspensions as a sign of renewed efforts by regulators to halt ongoing pump and dump schemes while they are underway.
Commanche Properties, Inc.
On January 31, 2005, the Commission suspended trading in the securities of Commanche Properties, Inc. (Pink Sheets: CMCH) for a ten day period beginning on January 31, 2005, and ending at 11:59 p.m. EST on February 11, 2005. In issuing the suspension, the SEC said that questions had been raised concerning Commanche's reliance on Rule 504 of Regulation D of the Securities Act of 1933, to sell securities which had not been registered. Regulation D permits the sale of unregistered securities to certain accredited individuals and entities. The SEC noted concerns that Commanche had failed to comply with the resale restrictions of Regulation D.
Commanche, which is quoted on the Pink Sheets, does not file regular reports with the SEC. Recently, the Company has been actively touted by spam e-mail touting the company's shares. Commanche claims that it develops "high-quality entertainment products. On January 24, 2005, the Company announced that it had entered into an agreement to develop three projects with Salvatore "Bill" Bonanno, whose father, Joseph Bonnano gained notoriety as head of one of New York's five organized crime families.
Commanche shares began trading on January 19, 2005.
Mosaic Nutriceuticals Corp.
On February 2, 2005, the Commission suspended another company, Mosaic Nutriceuticals Corp. (Pink Sheets: MSNJ), citing questions about the accuracy and adequacy of publicly disseminated information concerning, among other things, Mosaic's financial condition and its ability to fund advertising campaigns in support of its products. The Commission also expressed concern that Mosaic and/or certain of its shareholders may have unjustifiably relied on Rule 144(k) of the Securities Act of 1933 in conducting an unlawful distribution of its securities that failed to comply with the resale restrictions of Rules 144 and 145.
The Mosaic suspension commenced on February 2, 2005 and will terminate at 11:59 p.m. on February 15, 2005.
Mosaic says that it is in the business of marketing unique dietary supplements and products. The company, which trades on the Pink Sheets, became public earlier this year through a reverse-merger and does not file regular reports with the SEC.
Courtside Products, Inc.
Last week, the SEC suspended trading in securities of Courtside Products, Inc. (Pink Sheets: CSDP), again citing questions regarding the Company's failure to comply with the resale restrictions imposed by Regulation D. Courtside, like Commanche and Mosaic, does not file regular reports with the SEC. Consequently, the public has no access to meaningful information concerning the Company's financial state.
According to a report in the February 2nd edition of the Wall Street Journal, an attorney for Courtside, Tolan Furusho, claims that the Company agreed to go public after it was approached by stock promoters who promised a cash infusion of up to $1 million in exchange for 7.5% of Courtside's shares.
"This was a mom-and-pop shop and they saw it as an opportunity to expand production and marketing and go a little deeper into the sports-equipment business," said Mr. Furusho.
The promoters reportedly provided Courtside with a legal opinion stating that the Company could rely upon the Regulation D exemption and avoid registration of the securities. After Courtside issued the shares it learned that a fax and e-mail campaign touting its stock was under way.
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