Regulators beware. The propensity for the stock of any old company to
upon the issue of a Net-release will soon inspire a dramatic increase in fraud.
Think about it. Soon any company that already has a symbol, even a bankrupt company, can issue a release and get its stock going. That makes it even more imperative that the
tighten listing requirements for teetering companies.
falls on hard times and is struggling to keep its head above water. It files for exemption after exemption from Nasdaq listing requirements and keeps its listing. What is to keep National Gift from announcing a Web site to sell giftwrap while simultaneously offering hundreds of thousands of shares for sale?
This is money in the bank for the execs at National Gift. In fact, in a world in which releases are worth a million times their weight in gold, how could bad guys not be tempted to do this?
That's why to avoid a scandal
regulators should cull the ranks of near-deceased companies that trade to be sure that they are delisted. Don't wait for this obvious fraud to happen.
James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions.