The B.C. Securities Commission wants investors to avoid the lawless OTC Bulletin Board and "pink sheets" in the U.S. There are well over 800 B.C.-related companies that trade on them.
These 2 entities are not real stock exchanges. As reported in Investment Executive (July 2006), "They have no minimum listing requirements, trading is not monitored and news releases are not reviewed.
Bulletin board companies are required to file financial statements, but companies can be totally insolvent and still trade. Pink sheet companies don't even have to file financial statements. The result is that almost any piece of junk can trade on either market.
The migration of promoters to the U.S. OTC markets has created a strong demand for shell companies that can be used as vehicles for stock promotions. To meet the demand, promoters have established groups of locally based shareholders who will, for relatively modest remuneration, lend their names to meet share distribution requirements.
The putative shareholders usually agree to sell their shares to whomever acquires the shell, thereby ensuring that the supply of stock is carefully controlled. Their activity is critical to the process. With a restricted supply of stock, only small demand will be required to boost the stock price."