History of Penny stock in Timeline

Penny stocks are shares of small public companies trading below $5 per share. Defined by the U.S. Securities and Exchange Commission (SEC), they represent a financial instrument issued by these companies. The term originates from shares that traded for very low prices. The SEC's classification in 1934, under the Securities Exchange Act, stated that these low-priced securities could not be listed on national stock exchanges or indexes.

1934: Securities Exchange Act Passed

In 1934, the United States government passed the Securities Exchange Act to regulate securities transactions, and the SEC disclosed that equity securities trading for less than $5 per share could not be listed on national exchanges.

1989: American Investors Cheated

By 1989, American investors were being cheated out of at least $2 billion a year by schemes involving penny stocks.

1990: Penny Stock Reform Act of 1990 Passed

In 1990, Congressional hearings related to penny stock manipulation led to the passage of the Penny Stock Reform Act of 1990.

1992: Meyer Blinder Jailed for Securities Fraud

In 1992, Meyer Blinder was jailed for securities fraud after the collapse of his firm, Blinder, Robinson & Company, which specialized in the penny stocks sector.

February 10, 1997: Mafia Activity on Wall Street

On February 10, 1997, The New York Times reported that Mafia crime families were increasingly focusing on white collar crimes within small Wall Street brokerage houses.

May 1997: FBI Sting Operation

In May 1997, an FBI sting operation led to charges against Louis Malpeso Jr., Joseph DiBella, and Robert Cattogio for conspiring to commit securities fraud to inflate the price of penny stock "First Colonial Ventures".

2008: Market Downturn

During the market downturn of 2008–09, Securities traded on a national stock exchange, regardless of price, are exempt from regulatory designation as a penny stock, since it is thought that exchange-traded securities are less vulnerable to manipulation.

2008: De Maison Creates Public Companies

From 2008, Zirk de Maison created five small public companies with no legitimate business or assets to offer public shares of penny stocks.

December 31, 2010: Lithium Exploration Group's Market Capitalization Soared

According to the company's December 31, 2010, form 10-Q, Lithium Exploration Group's market capitalization soared to over $350 million after an extensive direct mail campaign, while its revenues and assets were zero at that time.

2013: De Maison Creates Public Companies

Until 2013, Zirk de Maison created five small public companies with no legitimate business or assets to offer public shares of penny stocks.

April 3, 2017: FBI Reports on Penny Stock Fraud

On April 3, 2017, the FBI reported that Zirk de Maison, a California resident, was found guilty of conducting a "pump and dump" scheme involving penny stocks.

June 2024: Yonz Technology Co. Ltd. IPO

In June 2024, Yonz Technology Co. Ltd. raised US$191 million by going public on the Shanghai Stock Exchange at an offer price of 23.35 Rmb per share, equivalent to a little over US$3.00 per share.