“Anonymous, paid stock promotion should have no place in the public markets. We are taking responsibility to provide transparency to investors and encourage public companies to disclose and correct misinformation that can harm the efficient market pricing process,” R. Cromwell Coulson, the CEO of OTC Markets, an exchange which lists 10,000 symbols from the world over, said in regards to a policy change at his exchange.

Coulson is referring to articles which have become commonplace in digital journalism in recent times — articles which could easily be mistaken for genuine reporting but are in fact “advertorials” written for the express purpose of pumping the stock in question. There is nothing technically illegal about the practice, but Coulson and plenty of others believe it is harmful to markets. While the exchange will not be delisting options found to be engaging in stock promotion, they have begun placing an indicator in the form of a megaphone to alert traders.

Among the companies most guilty of stock promotion are marijuana and blockchain businesses, the latter of which OTC Markets lists more than one. The companies it finds to be out stock promoting in a way that should have “no place in the public markets” are Global Blockchain Technologies Corp. and Block One Capital. In the case of the first, we quickly found this example of a stock promotion that is clearly labeled. Of the second, we found this.

The question of sponsored content plagues the digital financial journalism industry. Declining advertising revenues and high turnover rates can become a perfect storm of corruption and pay-for-play tactics. Ultimately the worst forms of sponsored content are never revealed to the reader — the writer is simply corrupted and writes in favor of the stock or fund incognito.

At the same time, stock promotion itself can be tracked to calculate trades. A site aptly called StockPromoters helps penny stock traders track pumps. They even offer “investor awareness” services.

Blockchain companies might be a bit more forgivable than companies in traditional industries for leveraging alternative means to get the name of their symbol out into the ether, however. They’re fighting an uphill battle, with Google and others now threatening their ability to even advertise their services. They must find some way to get their name onto the tongues of investors.

If or how this move by OTC Markets affects the price of these blockchain companies or any of the other 50-plus companies which currently earn the indicator, time will tell. If anything, so far, the move has amounted to free promotion for these companies, despite the negative connotation.

Featured image from Shutterstock.