Here is a very interesting picture for you from the SEC website.
This shows the annual number of SEC allegations in prior years on OTC companies.
Notice that the allegations against reverse mergers are even more than the allegations on manipulation.
In 2010, allegations were made on shell companies and reverse mergers, ten on manipulation, six on securities offerings, and very few on accounting, disclosure and reporting violations and insider trading.
As a matter of fact, shell companies accounted for more allegations of wrongdoing than all other categories put together.
Moral of the story for companies-- if you are have a shell company or are doing a reverse merger, get a competent securities lawyer. I find in looking at these deals that in almost all cases, the people could have done it right but went and violated the rules anyway. Either they were the type of folks who violate the rules, or the type who didn't know any better, but they wound up in trouble anyway.
Moral of the story for investors -- Good to think twice before gambling on these stocks, often better to avoid them altogether unless you are professional. You are swimming with the sharks for sure.