Here is a forwarded email from the Chairman and CEO of Pink Sheets. I do not know the date of the memo, but I think it was sent on 5/26. As you can see a lot of the facts are wrong, plus you can see whos side they are on. Very interesting:
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Dear OTC market participant:
We have received many calls in the last few days regarding Gluv Corp (Other OTC: GVRP), a stock that trades in the Pink Sheets. We are very concerned about this situation and have been communicating our concerns to regulatory authorities. Let me say at the outset that it is a shame that these things occur in our twenty-first century markets. These are the facts, as far as we can tell.
On April 29, 2005, GVRP (then trading under the symbol GLVP) announced that it would be doing a reverse split, issuing one share for every 6,500,000 shares outstanding on May 12, 2005. Fractional shares were to be bought out at $.0005 each. The press release stated that the purpose of this transaction would be to eliminate minority shareholders; i.e. each of the eleven remaining shareholders would be affiliates of GVRP. The Dow Jones news wire reported that this reduced the number of shareholders to eleven.
Having successfully removed GVRP’s minority shareholders and thus all of their public float from the OTC markets, it seems that GLVP then decided to do a forward split, issuing 3 million shares for each of the eleven shares outstanding. This split was effective on May 23, 2005. Apparently, one of the eleven holders then decided to sell his stock, resulting in considerable confusion. It is also possible that some of the old stockholders who were cashed out in the reverse split were confused and decided to sell shares they didn't own.
The above information generates the conclusion that GVLP did not have any shares eligible to be freely traded in OTC secondary market transactions. An affiliate is not permitted to sell shares into the public markets, unless the shares are registered or the shares are sold pursuant to Rule 144. Since we do not have any information that a Form 144 was filed with the SEC and/or adequate current information was publicly available about GVRP, affiliates were not permitted to sell their stock under the Rule 144 safe harbor. It seems apparent that someone was selling (and purchasers receiving and reselling) unregistered stock in violation of the securities laws and that some broker-dealer failed to determine whether its customer was permitted to sell this stock, or even had stock to sell, disregarding the "know your customer" rules.
Our opinion is that trading needs to cease and all trades since May 12th should be cancelled. But, Pink Sheets is not a regulator and has no authority to cause that result. Thus Pink Sheets is supportive of broker-dealers efforts to work with the SEC and NASD to establish the full facts regarding this situation and find an appropriate solution. We will of course supply any information we have concerning the trading in GVRP to broker dealers and securities regulators that request it.
Unfortunately, this sort of activity is completely unnecessary in today's markets. There should be a procedure for prompt notification to an appropriate regulator so that "clearly erroneous" trading can be easily halted before damage is done and funds are released. A fast OTC regulatory halt authority will protect investors and minimize back office confusion. As it is, no one is sure who to call so that many more trades occur while the various regulators work to determine where the problem belongs. This results in investor frustration, lost resources, and we suspect, from time to time the people responsible for this activity may get away with it. None of which are desirable.
Situations like this only happen if the sneaky operators think they can get away with it. Thus we are strongly in favor of broker dealers and the securities regulators singling out one regulatory path for prompt action so situations like this are easily halted.
We will provide further updates when we know more.
R. Cromwell Coulson
Pink Sheets LLC
Chairman & CEO
304 Hudson Street, 2nd Floor
New York, NY 10013
212.896.4444 w
212.868.3846 f
It's not having what you want, but wanting what you've got -Cheryl Crow
DRat
