Posted Jun 22, 2007 03:06 pm CDT
Floyd Norris of the New York Times sees a big difference between federal disclosures made by a penny stock company and the reality.
Universal Express leaves some details out of its filing with the Securities and Exchange Commission, Norris says. It does not mention that a New York judge ordered the company and its officers to pay $21.9 million for violating securities laws, for example. The judge barred the company and its chief executive from participating in penny stock sales.
For its part, the company says the SEC is a bully that pursued it for criticizing the agency. “Naked short selling” caused the drop in its stock price, the company says.
Norris calls Universal Express “a small company that loses money even faster than it issues news releases.” Yet the company is still issuing billions of unregistered shares.
Norris concludes it shows how difficult it can be for the SEC to stop companies from conduct it views as fraudulent.