Thank goodness we have the SEC to protect us from ourselves.
The SEC sent out a warning today cautioning investors to be on the lookout for shady "microcap companies that claim their operations relate to the marijuana industry after the agency suspended trading in the fifth such company within the past two months."
The SEC issued an investor alert warning about possible scams involving marijuana-related investments, noting that fraudsters often exploit the latest growth industry to lure investors with the promise of high returns. “For marijuana-related companies that are not required to report with the SEC, investors may have limited information about the company’s management, products, services, and finances,” the SEC’s alert says. “When publicly available information is scarce, fraudsters can more easily spread false information about a company, making profits for themselves while creating losses for unsuspecting investors.”
What's hilarious about this investor alert is that no sooner did I get it from the SEC than another press release came in, this time from an over the counter group inviting international partners to open medical marijuana dispensaries worldwide. BEWARE!
Getting back to the SEC, they've been busy already this morning, suspending trading in Denver-based FusionPharm Inc. (LOL, stoners huh), "which claims to make a professional cultivation system for use by cannabis cultivators among others." It appears the SEC is concerned FusionPharm's assets, revenues, and financial condition may not be accurately represented to investors.
“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.”
In other words, the SEC doesn't want investors buying a sack purported to be Kush but really just stems and seeds.
Global Reporting Standards are gaining popularity among investors and finance executives, according to a new report by ACCA. Around 170 senior executives and investors were questioned. More than 40% said international financial reporting standards improve access to capital, while around 25% believe the global standards have lowered capital costs. ACCA chief executive Helen Brand said: “Growing support amongst CFOs and investors for [IFRS] must be considered carefully” by US regulator the SEC as it debates converging US GAAP with international standards. “We believe a positive answer from the SEC would give a tremendous boost to the cause of financial reporting and more importantly the world economy.” [