Has The SEC Obliterated The Pot Penny Stock Craze?

On the surface, it seems the SEC played an important role in the sell-off of pot stocks that has taken place since it temporarily halted a prominent pot stock called Advanced Cannabis Solutions in late March. There have been other factors, like critical press.

For now, pot stock players are begging for mercy. John Germinario, who in April became chairman of pot stock Creative Edge Nutrition, last week wrote a letter to the SEC saying he was appalled with the SEC’s shot gun approach against the pot stock sector. It has resonating effects on the entire industry which include companies that are not involved in the investigations, wrote Germinario.

The investor alert targeting the marijuana industry has caused my company’s share price unjustifiable reduction of over 50% in a few days. This is unacceptable! The SEC’s actions may have deflated the pot stock bubble and tarred the industry with a broad brush, but its limited crackdown has allowed some pot stocks to continue trading tens of millions of shares following temporary halts with no regulatory follow up about some pretty serious accusations.

Those shares now trade on the so-called gray market, meaning that investors are operating largely in the dark and can only see the last market price for a stock they cant see recent bid or ask quotes.

To read more, visit http://www.forbes.com/sites/nathanvardi/2014/05/27/has-the-sec-killed-the-penny-pot-stock-boom/

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