OTC Markets' Warning Symbols Explained

The OTC Markets, which are divided into three tiers: the OTCQX Best Market, the OTCQB Venture Market, and the Pink Market, trade over 10,000 securities.

The Pink Market trades a wide range of firms, including overseas corporations with limited disclosure in the United States, penny stocks and shell companies, as well as troubled, delinquent, and dark companies who are unwilling or unable to offer information to investors. The amount of publicly available data varies from firm to company.

OTC Markets has designed investor protection symbols to warn against firms that may entail greater risk than others, in order to assist investors to better understand the risks connected with these securities and to give more transparency.

On otcmarkets.com, numerous of these symbols may show on a corporate quote page.

Here's a breakdown of what each one represents.

BANKRUPTCY

This indicator denotes that the firm has filed for bankruptcy or has indicated its intention to do so. This would exclude securities from trading on the OTCQX and OTCQB marketplaces.

CAVEAT EMPTOR

This caution, which literally means “Buyer Beware,” informs investors that the corporation is involved with a public interest matter. The Caveat Emptor flag might be triggered by a spam campaign, dubious stock marketing, known investigation of fraudulent activities performed by the firm or insiders, regulatory suspension, or disruptive corporate action.

CONTROL DISPUTE

When many parties claim ownership of a firm, a Control Dispute arises. Control conflicts are often preceded by upheaval in a company’s leadership structure, which can have a negative influence on its stock.

DARK OR DEFUNCT

Because the corporation is unable to give transparency to the public markets, investors are likely to have little to no information.

DELINQUENT

The corporation has not met its reporting responsibilities under Section 13 or 15(d) of the Securities and Exchange Commission Exchange Act.

PROHIBITED SERVICES PROVIDER

This flag indicates that a corporation has an active relationship with a service provider that the OTC Markets Group has designated as forbidden.

PROMOTION RISK

This symbol signifies that OTC Markets has cause to suspect securities is undertaking dubious public stock marketing at the moment. To put it another way, false information is being broadcast through some channel (social media, newsletters, etc.) in order to manipulate the market in some way.

SHELL RISK

Based on a review of the firm’s major yearly financial data, the Shell Risk label cautions that a company exhibits traits typical to shell corporations. Shell corporations have few or no assets and operations.

UNABLE TO CONTACT

This badge denotes that OTC Markets Group was unable to validate this company’s contact information.

Comments

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