NEWS: OTC Markets Group Launches New Stock Promotion & Shell Risk Flags

On Wednesday, OTC Markets Group announced that a new stock promotion flag will enable investors to easily identify securities that are the subject of current promotional activity. This new flag, which is shaped like a megaphone, will appear on the promoted company’s quote page on

Stock promotion flags are part of an initiative OTC Market Group announced in November 2017 to improve overall market transparency for investors and better address the problem of fraudulent stock promotion.

Manipulative and misleading stock promotion continues to be an industry-wide concern that affects trading on both national exchanges and in the OTC markets. Promotion is not only a problem associated with the smallest companies, as historical stock promotion data shows 70% of the dollar volume impact is in securities listed on a national exchange. Stock promotion harms investors, impedes capital formation and disrupts efficient pricing mechanisms.

Anonymous, paid stock promotion should have no place in the public markets,” said R. Cromwell Coulson, President and Chief Executive Officer, OTC Markets Group. “We are taking responsibility to provide transparency to investors and encourage public companies to disclose and correct misinformation that can harm the efficient market pricing process. We continue to work with regulators to advocate for the modernization of promotion regulations, including requiring additional disclosure around paid stock promotion and identifying the people associated with these campaigns.

OTC Markets Group’s compliance team actively monitors a variety of sources and collects input from their strong network of market participants to determine if a security is being promoted and performs research prior to publishing the information on The promotion flag will remain on the company’s quote page until 15 days after the last promotional material is distributed.

In addition to the new stock promotion flag, OTC Markets also added a shell risk flag. The shell risk designation indicates that a company may be a Shell Company, as defined by SEC rules. This designation is made at OTC Markets’ discretion based on an analysis of the company’s key financial data.



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