SEC Fraud

Many people have become familiar with online purchasing and buying penny stocks is no different. This can prove a fast and convenient way of investing in stocks while earning extra income on the side. Regardless if you’re researching stockbrokers, the current market conditions, or making your stock picks, every step of this process can be completed from home.

You’ll want to do a lot of research before investing, but it’s probably better if you seek the advise of a professional. Alhough the risk factor involved in these stocks is relatively low, due to the fact that penny stocks can be bought and traded for under five dollars, it’s still a speculative investment. So, even though penny stock picks are known for their incredibly inexpensive price tags, you’ll still want to make sure you’re not investing your capital into a sinking ship. Unfortunately, one of the reasons a stock can be obtained at such a low cost is the instability of the shares involved. This shouldn’t sway you from the idea of penny stocks, as many new companies also start off with economically priced shares, but it is something to keep in mind when making a decision.

It is also wise to be careful about who you take penny stock tips from, as there are some individuals who solicit people via email, in an effort to convince them to invest in fraudulent stocks. Investors should be warned to only take tips from advisors once you are confident in their credibility and success rates.

Once you’ve found and purchased your stocks, which can range from a penny to five dollars a share, you’ll want to consistently monitor the value of the penny stocks in your portfolio. These stocks can be volatile and increase or decrease in price rapidly, making it necessary to view their statuses several times a day.

Unlike long-term investments, the goal of trading stocks is to make a quick turn-around profit. Holding on to a stock for a long time will not be beneficial. A stock can be purchased today with the intent of selling it tomorrow if the price has increased. Trading quickly is a key aspect of penny stock trading.

Once a person is confident in their knowledge of the world of online penny stock trading, it can be a quick and easy way to earn money.

The SEC just announced that six former executives at the defunct Brooke Corporation, and two subsidiaries, have been charged with financial fraud:

The SEC alleges that senior executives at Brooke Corporation and two subsidiaries – whose line of business was insurance agency franchising and providing loans to franchisees – misrepresented their deteriorating financial condition in filings to investors and other public statements in 2007 and 2008. Meanwhile, behind the scenes they engaged in various undisclosed schemes to meet almost weekly liquidity crises, and falsified reports and made accounting maneuvers to conceal the rapid deterioration of the loan portfolio.

Five of the six executives agreed to settle, with the sixth going to litigation. The six individuals charged were:

• Robert D. Orr – founder and former chairman of the board of Brooke Corporation, former CEO and chairman of the board of Brooke Capital, former CFO of Aleritas.
• Leland G. Orr – former CEO, CFO, and vice chairman of the board of Brooke Corporation, and former CFO of Brooke Capital.
• Kyle L. Garst – former CEO, president, and member of the board of Brooke Capital.
• Michael S. Hess – former CEO and member of the board of Aleritas.
• Michael S. Lowry – former CEO and member of the board of Aleritas.
• Travis W. Vrbas – former CFO of Brooke Corporation and Brooke Capital.

All but Garst have settled.