Background checks are a good thing

Penny stock Energytec (OTC BB: EYTC) had found a new CEO, Don Lambert, and things looked good. However, according to the SEC, Lambert “failed to disclose his prior federal securities fraud conviction, his multiple bankruptcies, and that he had forfeited his Texas law license to avoid being disbarred.” One would think a public company, even a tiny company traded OTC, would think to do a background check or a credit check. But they didn’t. Because the company’s SEC filings did not include this material information, the SEC went after Lambert and made him pay a $50,000 fine. He consented to the judgment “without admitting or denying the allegations.”

Disclosure: I have no position in EYTC.

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