Securities Law Blog

FINRA, NYSE and NASDAQ issue alerts to their members on the recent trend of significant unusual price increases on the day of or shortly after the IPOs of small-cap issuers, most of which involve issuers with operations in China and other foreign countries, as part of so-called “ramp and dump” schemes, and place the obligation to battle the schemes on underwriters as “gatekeepers to the public markets.”

Boards of directors of small- and micro-cap issuers should consider adopting stock ownership guidelines to align the interests of its directors with the interests of stockholders and further promote the company’s commitment to sound corporate governance.