US shell companies draw more scrutiny
The OTC market has long been a place ripe for exploitation by fraudsters, who manipulate shares of such firms to make illegal profits through "pump-and-dump" schemes
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NEUROMAMA Ltd might be the most prominent example, but it's unlikely to be the only one.
On Monday, the Securities and Exchange Commission (SEC) halted its shares, which trade on over-the-counter (OTC) markets in the US, over "potentially manipulative transactions" and concerns about the "identity of the persons in control". There were red flags over the years. But Neuromama, which has ambitions to license "heavy ion fusion technology patents" among its many projects, began to draw more scrutiny this year after its paper value more than quadrupled to US$35 billion on scant volume. Before its suspension, the market cap of Neuromama, which was based in south-west Siberia before moving to a beach community near Tijuana, Mexico, was greater than even Tesla Motors Inc.
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