US ‘Pink Sheets’ in Shakeup as Securities Regulator Looks to Stamp out Fraud

US ‘Pink Sheets’ in Shakeup as Securities Regulator Looks to Stamp out Fraud
Outside of a Sears department store one day after it closed as part of multiple store closures by Sears Holdings Corp. in the United States in Nanuet, N.Y. on Jan. 7, 2019. Mike Segar/Reuters
Reuters
Updated:

WASHINGTON/NEW YORK—As many as 2,000 companies could disappear from the off-exchange “pink sheets,” long a favorite of retail investors, when a new rule aimed at stamping out fraud in this notoriously risky enclave of U.S. equities markets comes into effect next week.

The Securities and Exchange Commission (SEC) rule boosts investor disclosures by requiring off-exchange issuers, frequently penny-stock companies that do not meet the main exchanges’ listing standards, to make accurate, up-to-date financial information publicly available.