IsraelInvestor.com - OTCBB & Pink Sheets stocks

2002: Merrill Lynch pays $100 million after e-mails from ex-Internet analyst Henry Blodget emerge. He calls one stock "a piece of crap" while rating it "accumulate."

This Day In Financial Speculation History

Events

2002 – This day in the history of scandalized businessmen: CEO Bernard Ebbers of soon-to-be-bankrupt WorldCom tells analysts, “To question WorldCom’s viability is utter nonsense. I highly recommend everyone step back and focus on reality rather than the fear factor.” Elsewhere today in sworn testimony to a House subcommittee, Enron mastermind Jeffrey K. Skilling confides, “On the day I left, I absolutely and unequivocally thought the company was in good shape.”

Dirty Secrets:

1. The OTCBB is not an exchange in the traditional sense; it is strictly a quotation service. It was created by Nasdaq in 1990 to provide more transparency to securities that were traded over the counter without any electronic record. Trades are now made by telephone between market makers.

2. Nasdaq has no business relationship with OTCBB issuers. OTCBB companies do not have any minimum financial requirements. An issuer can have no assets or revenues -- in fact, it can be hopelessly insolvent and still trade.

3. The 100-year-old Pink Sheets (named after the colour of stationary originally used to publish stock quotes) is a privately owned and completely unregulated market. Issuers don't have to have a viable business or file yearly financial statements.