The Securities and Exchange Commission just made investing more dangerous for the little guy.
Under a new proposal, nearly 1,000 more companies can omit disclosures about their internal accounting controls that warn investors of potential red flags. This rule change puts investors in micro-cap stocks in the Danger Zone.
Background on This Reduction in Protection
Under existing rules, companies with under $75 million in public float are defined as "smaller reporting companies" (SRC's) and exempted from some disclosures that are mandatory under Section 404((B)) of the Sarbanes-Oxley Act. Most notably, these firms don't have to