The B.C. Securities Commission has issued cease-trade orders against 53 public companies trading on the U.S. over-the-counter markets for failing to file financial statements.
"We've carefully looked at each company to make sure it does have significant B.C. connections and they did not make their filings," said Martin Eady, BCSC's director of corporate finance.
The move comes three months after new regulations came into effect that require companies with significant connections to B.C. that trade on the over-the-counter bulletin board or the pink sheets to file financial statements and other documents with the BCSC.
Eady noted that thus far 150 OTCBB and pink sheet-listed companies have filed the necessary financial statements. About 150 companies have yet to file, but Eady noted that some might not need to file yet, depending on their fiscal year-end.
While the cease-trade order will affect only investors and company insiders based in B.C., Eady said it will be flagged on the OTCBB and pink sheets websites.
"The warning [on the pink sheets website] is a skull and crossbones beside the quote of the stock, which means, there is something wrong or a flag on the company."
The new rules for OTCBB and pink sheet companies were 18 months in the making and included consultations with the U.S. Securities and Exchange Commission. In addition to requiring regular filings of financial statements, directors and officers of B.C.-connected OTCBB and pink sheet companies must file insider reports and personal information forms.
The regulations are part of securities commission efforts to short-circuit "pump and dump" and other stock scams of OTCBB and pink sheet-listed shell companies that originate in B.C.
The full list of companies cease traded can be found on the BCSC website: http://www.bcsc.bc.ca/release.aspx?id=7522.