The $100 million company that owns a New Jersey deli was delisted from an over-the-counter market platform due to public disclosure “irregularities,” based on the firm that booted that the mysterious delicatessen operator.

OTC Markets Group executives additionally advised CNBC on Thursday that they’re now analyzing the filings of a second firm — E-Waste — a shell company that has a number of ties to deli proprietor Hometown International.

Like Hometown International, E-Waste has an extremely excessive market capitalization regardless of having little if any important enterprise operations.

Hometown International’s market capitalization has topped $100 million despite owning only a Paulsboro, New Jersey, deli, which had gross sales of lower than $37,000 mixed previously two years.

Hometown International, which trades under the image HWIN, had a “purchaser beware” label slapped on it Wednesday evening when OTC Markets relegated it to Pink, a much less prestigious over-the-counter platform.

OTC Markets CEO Cromwell Coulson stated in a tweet Wednesday that Hometown International’s demotion and warning label have been attributable to “public curiosity issues” – and for “not complying with the principles.”

OTC Markets officers on Thursday wouldn’t say whether or not they have contacted the Securities and Exchange Commission, which regulates publicly traded corporations, about their issues with Hometown International.

But OTC Markets basic counsel Dan Zinn famous that each suspension or motion the firm takes towards one of many 11,000 corporations that commerce on its over-the-counter market platforms is “all publicly obtainable, so the SEC and FINRA [the regulator of broker-dealers] has entry to all of those.”

“Frequently, now we have plenty of back-and-forth with the SEC,” Zinn stated in an interview. “We do it so much, and we do it sometimes behind the scenes.”

The SEC didn’t instantly reply to a request for remark from CNBC.

Hometown International officers didn’t return requests for remark.

Hometown International drew scrutiny from OTC Markets after hedge fund manager David Einhorn mentioned the company as a cautionary example to retail investors, given its extraordinarily excessive valuation with out important gross sales on the deli.

“The pastrami should be superb,” Einhorn cracked concerning the store, which is positioned throughout the Delaware River from Philadelphia.

Indeed, the deli has received raves for its Sicilian and Italian hoagies from a number of curious prospects, including Pete Genovese, a meals critic at New Jersey’s Star-Ledger newspaper. There’s no pastrami on the menu, nevertheless.

Einhorn additionally had famous that the company’s CEO is a high school principal, Paul Morina, who additionally is the pinnacle coach of Paulsboro’s extraordinarily profitable highschool wrestling workforce.

OTC Markets’ curiosity in Hometown International was additional fueled by CNBC articles detailing regulatory sanctions towards the firm’s accountants, first lawyer and a former broker connected to the father of the company’s chairman. Those articles also detailed criminal convictions of people connected to the firm, and legal issues surrounding the daddy of the chairman.

Jason Paltrowitz, government vice chairman for company providers at OTC Markets, stated that “the easy factor, that it is a deli buying and selling at an obscene valuation” is not the rationale the company was delisted.

“However, what involved us right here have been the issues that have been being publicly disclosed,” Paltrowitz added. “There have been irregularities in what was out within the public area … when you dug deeper into the filings.”

“It wasn’t merely that it was a extremely valued deli. That stuff occurs,” he stated. “But that did trigger the evaluation.”

Asked concerning the nature of the irregularities OTC Markets found in Hometown International’s paperwork, Zinn stated, “We’re not going to get hyper-specific about anyone company.”

OTC Markets stated that Hometown International could not re-apply to be listed once more on OTCQB for at the least 90 days.

“The Caveat Emptor designation will stay till OTC Markets Group believes there is not a public curiosity concern,” OTC Markets stated.

That designation features a “skull-and-crossbones” icon subsequent to a inventory’s buying and selling image “to tell traders that there could also be motive to train extra care and carry out thorough due diligence earlier than investing resolution in that safety,” the company’s coverage says.

Hours earlier than OTC Markets delisted Hometown International from the OTCQB, an article by CNBC detailed E-Waste’s connections with the deli owner.

The inventory of E-Waste, which is being traded on the Pink market, is priced at greater than $eight per share, giving the company a market capitalization of greater than $80 million regardless of not having any ongoing enterprise.

Like Hometown International, E-Waste’s inventory has as a rule traded in very small share quantities every day in comparison with the tens of millions of shares every company has excellent.

SEC filings point out that Hometown International loaned E-Waste $150,000 late final yr. Global Equity Limited, a Hong Kong entity, is the largest shareholder of each corporations. Each company additionally has consulting agreements with a North Carolina company run by Peter Coker Sr., the daddy of Hometown International’s chairman.

The corporations additionally use the identical New York legislation firm for filings. Coker Sr.’s workplace in North Carolina is used as a mailing deal with for E-Waste.

E-Waste’s CEO is John Rollo, a Grammy-winning recording engineer and producer, and former operations vice chairman of a New Jersey switching and sensor producer. He extra just lately has labored as a affected person transporter at a northern Jersey hospital.

Rollo has not returned requests for remark. Neither has Coker Sr.

OTC Markets’ Paltrowitz stated that there is no “caveat emptor” label on E-Waste.

But he additionally stated the firm’s standing on the Pink market is “being reviewed.” It trades under the ticker image EWST.

Zinn stated that OTC Markets has restricted energy over the shares on its exchanges past relegating them to less-prestigious markets or slapping them with a warning label.

“We haven’t got that energy to say that image is revoked,” Zinn stated.

Only the SEC has that energy, he added.