IFGX Blog

  A gypsy swap represents a way of raising capital that entails encouraging existing stockholders to swap their free trading common stock into restricted stock. This kind of transaction-gypsy swap, stock promoters have been using for a long period of time. Thus to the Securities and Exchange Commission, gypsy swaps are a method of evading the Securities Act of 1933, and violate Section 5 of the Securities Act. Both investors and issuers should be aware of transactions that seem to be legal on the surface but in effect are gypsy swap transactions that are illegal under securities regulations. The SEC has stated categorically that gypsy swaps are breaches of Section 5 of the Securities Act, and that all parties are subject to monetary and other civil penalties, which also include disgorgement.  It’s crucial for investors and issuers to note that a gypsy swap is only one approach to get around Section 5 of the Securities Act’s registration obligations. Any transaction in which the iss

This kind of action, stock promotion, in the first place affects investors then restricts capital development, and in the end undermines effective pricing methods throughout all markets. So stock advertising represents an issue in the industry if it's deceptive and manipulating, by impacting trade the national stock market on the one hand and over-the-counter on the other.  To prevent this OTC Markets Group created a Promotional Risk flag, which is the way investors can detect this kind of stock promotion program. The first thing that the OTC Markets team does is accumulate data from a large group of players and study it just before displaying the Promotional Risk flag on their website if they notice any sign of stock promotion. In this group of stock promotion signs OTC Markets Group just added another one-Shell Risk designation. That mark warns that a firm shows criteria common of shell firms based on an assessment of the firm’s main annual financial records.  What is recog

According to the SEC, a penny stock is any share of a publicly traded corporation that trades for less than $5. In addition, the market cap of these firms is lower. These types of stock are usually shares of firms that are either in the early stages of development or have yet to achieve a large market share in their industry. Nevertheless, this does not imply that penny stocks are worthless. On numerous occasions, these types of firms are devoted to the latest innovations. As a result, market players will acquire them based on assumptions rather than overall outlines. This type of stock, as we can see from the first paragraph, pertains to the stock of tiny businesses. Although some penny stocks are traded on major exchanges like the NYSE, the vast majority are quoted over-the-counter (OTC) via the electronic OTCBB (which is a facility of FINRA) or the privately held OTC Markets Group. Trading penny stocks is a great way to make both quick money and may pay off as a long-term invest

The SEC amended Exchange Act Rule 15c2-11, which is a crucial element of the over-the-counter (OTC) market regulatory system. The changes are intended to improve the rule, which was last considerably changed about thirty years ago, and to take into account developments in communications technology.   Prior to actually posting quotations in OTC securities, broker-dealers must analyze current and information available to the public, according to the modified rule. To improve investor protection, the amendments also restrict some of the exemptions available under Rule 15c2-11 and add new exclusions for low-risk securities.     Given the current rule’s timeliness and modifications, its practical implementation streamlines the process of small-cap companies going public. For firms accessing the OTCQB and OTCQX markets, OTC Markets Group can now undertake “Initial Reviews” under Rule 15c2-11, which is a replacement to the regular FINRA Form 211 process.   The revisions to the Sec

Regulation A, generally known as Reg A, exempts public offerings from registration. However, the disclosures needed within this exemption are analogous to those needed in registered offerings. Companies that take advantage of the exemption have significant benefits over others that must register completely.   Firms that use a Reg A can sell and offer their securities to the public in two tiers, each with its own set of rules: Tier 1 and Tier 2. A company’s size determines the different tiers, but there is one requirement that these companies must meet- they must submit an offering statement with the Securities and Exchange Commission, as well as an offering circular, that represents a disclosure document for investors.    Tier 1 offerings are those that are worth up to $20 million in a 12-month period, with a max of $6 million in secondary sales by the issuer’s affiliates. Offers and sales that are related to Tier 1 are susceptible to qualifying criteria and the blue sky regist

For beginners, putting together a profitable investment portfolio is a difficult undertaking, but there are plenty of ways to do so. The ideal strategy for a given investor will be determined by a number of characteristics, including risk tolerance, time frame, and the amount of capital available for investment.   In terms of investing, growth can be explained in various ways. In the investment world, growth is typically characterized as capital appreciation, which occurs when the price or worth of an investment rises during the time. Short-term and long-term growth are both possible, but significant short-term growth involves a higher level of risk.   The next strategy is purchasing and holding investments and represents likely the most straightforward technique for generating growth that can even be one of the most beneficial throughout time.   This method applies to those who pay closer attention to the markets or particular assets and can outperform the buy-and-hold met

If you want to sell restricted, unregistered, or control securities in a public market, you will need to get an exemption from the SEC’s (The Securities and Exchange Commission) registration requirements.  The rule lays out a series of requirements that a shareholder must complete in order to sell or resell unregistered, “restricted”, or “controlled” securities in the open market.   Restricted securities are those purchased from the issuing corporation or an affiliate of the issuer through unregistered, private transactions.    The securities owned by an affiliate of the issuing firm are known as control securities, so this person is a person who has a controlling relationship with the issuer, such as an executive officer, a director, or a major shareholder.   So, if you are in this position and intend to sell these types of securities, you can comply with Rule 144’s requirements.   As we mentioned in the previous paragraphs, restricted, unregistered, and control securi

To trade on the exchanges, any security or stock requires a market of sellers and buyers. So, what are their main  role,  and who the market makers are?  They are traders, sort of speaking “creators of a market “, for securities by being ready to purchase or sell at any time. They benefit from the difference in the bid-ask spread and secure liquidity and depth to markets.   Typically market makers are brokerage firms, large banks, or other financial institutions. Their job is to ensure that there is enough trading activity for traders to run smoothly. As we can see, they are a necessary link in the chain, and without them, there’d certainly be minimal liquidity.   To put it another way, if there are not enough buyers in the market, investors who want to sell assets will be unable to do so, without market makers’ assist, because they enable keep the market running, which means they will be there to buy it. Correspondingly, if you want to purchase a stock, they will have it acces

We can begin with the fact, that the stockbrokers are mainly intermediaries.  They are financial specialists who place orders on behalf of clients in the market. Stocks are purchased and sold on stock exchanges like the New York Stock Exchange, the Nasdaq, and OTC markets, and most investors who would like to trade stocks require broker assistance.    Stockbroker capabilities include responding to the client’s requirements and interests, as well as comprehending market fluctuations and generating consistent, predictable profits. Considering the market’s sensitivity, this could be a risky task.   Brokers are required to register with FINRA (Financial Industry Regulatory Authority). There are several types of brokers, which can be categorized into two groups: full-service brokers and discount brokers.   Full-service brokers are traditional brokers who offer extra significant services to their clients, including trading stocks, investment personalized advice, market research,