Olshan Discusses FINRA, Stock Exchange Crack Down on Small-Cap IPO “Ramp and Dump” Schemes

On November 17, 2022, the Financial Industry Regulatory Authority (“FINRA”) issued a special alert to FINRA members concerning the heightened threat of fraud in small capitalization initial public offerings (“IPOs”). At the same time, both the New York Stock Exchange (“NYSE”) and the Nasdaq Stock Market (“NASDAQ”) released separate notices to their members expressing similar regulatory scrutiny in connection with small-cap IPOs. In Regulatory Notice 22–25, FINRA observed the recent trend of significant unusual price increases on the day of or shortly after the IPOs of certain small-cap issuers, most of which involve issuers with operations in China and other … Read more