The OTC Bulletin Board was a United States quotation medium. The Financial Industry Regulatory Authority (FINRA) offered its member free access to their services. Traders and investors used the board to trade stocks that where not listed on other stock exchanges. FINRA closed the OTCBB in 2021. Most stocks moved to other trading platforms of the OTC Markets Group. The U.S. Securities and Exchange Commission stated that fraudsters would make their investors believe that OTCBB-listed companies were bigger than they were.
4,100 firms and 639,780 brokers used the OTC Bulletin Board, which was regulated by FINRA. It collected all quotes until the OTC Markets Group released its electronic quotation system. In 2009 FINRA decided to sell the OTCBB. The OTC Markets Group wanted to buy it, but they couldn’t agree on the terms. Investment bank Rodman & Renshaw ended up buying the OTCBB.
FINRA wanted to regulate the OTC trade and make it more transparent. For this reason, they proposed a quotation consolidation system that would require brokers to report all their quotes. Most brokers found this anti-competitive and abusive of FINRA’s regulatory authority. Listed companies would have to report in the same way as SEC fillings, but with no market capitalization, minimum share price, or other requirements. Companies that became de-listed from other stock exchanges often ended up listed on the OTCBB. An E after a ticker symbol indicated that a company didn’t file its SEC filings on time.
OTCBB-listed companies were often penny stocks that were dually quoted, both on the OTCBB and another stock exchange. Investors stayed away from these stocks as there was too much fraud going on. Companies tried to become listed on exchanges like the New York Stock Exchange or NASDAQ to raise their creditability because of this.
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