Coral Capital Partners looks at recent SEC enforcement actions involving wrap around agreements, which are being used by companies and stock distributors to illegally convert debt into free trading shares. This has been a common practice since the SEC revised Rule 144 back in early 2006. The complaints provide a very good explanation as to how these wrap around agreements work In the most recent action the SEC sought sanctions against the attorney who wrote the legal opinions allowing for the shares to be issued without restrictive legends via the exemption provided by Rule 144.
Author: coralcapital
Erik Nelson is the co-founder and President of Coral Capital Partners, Inc. an Atlanta based consulting and advisory services firm. Coral Capital Partners was founded in 1995 and has been providing consulting services to both privately held and publicly traded companies since its inception. Mr. Nelson has served as an officer and director of numerous publicly traded companies in various capacities as part of the services provided by Coral Capital Partners to its clients. Mr. Nelson is a graduate of the University of Colorado.
SEC Action Involving Scheme with Fictitious Company Name
Coral Capital Partners looks at an SEC Enforcement action against a group of individuals who operated a fictitious company that claimed ties to a legitimate major financial corporation. We also take a look at how investors could have easily discovered this, and avoided their losses.
SEC Action Regarding False and Misleading Press Releases
The SEC recently initiated litigation against the controlling shareholder of two (2) public companies for causing those companies to issue false and misleading press releases. In its complaint against this individual, the SEC claims that over a several month period of time, he caused the companies to issue press releases and other public disclosures containing false and misleading information. The SEC charges that during this period of time there was a suspicious increase in the trading volume and share prices of the companies in question.