You may have wondered why your stock is suspended from trading. The SEC suspends trading in securities for reasons of public interest. Typically, these events result in a sharp decline in the price of the security. However, it is possible that the SEC is protecting potential investors from fraud. Here are some things you should know. After a suspension, you should contact the broker-dealer that sold you the security or published a quote before it was suspended. They may be planning to resume publishing a quote soon. If trading has ceased, the price may have fallen significantly.
There are many reasons why a company may suspend trading. The SEC can suspend the trading of stock in a company for several reasons, including a lack of current information. Lack of information can raise concerns about insider trading and market manipulation, among other things. In most cases, the issue is due to a lack of current financial information, and the company will have to submit its financial statements to resolve the issue. However, instances of fraud or fraudulent behavior can have more lasting effects.
A suspension may affect both regional and global markets. In the United States, for example, a suspension of the New York Stock Exchange would affect the NASDAQ stock index. But other financial markets may also be affected by a suspension. If the SEC decides to suspend trading, you can still access assets on international markets, such as foreign exchanges. As long as you are careful and investigate the cause, you should be able to trade in stocks without any problems.
In addition to suspending trading, a suspension can result in the removal of a company’s registration. In such cases, your broker-dealer must submit a Form 211 to FINRA, which oversees securities industry regulation. The company must file this Form before the suspension is lifted, and you must know the status before recommending a stock. For further assistance in dealing with a suspension, Jacko Law Group, PC can design a training program for your team.
When a company files for bankruptcy, the SEC will suspend trading. When this happens, the SEC will issue a press release explaining the reason for the suspension and will not comment on the outcome of the investigation. During this time, investors will not be able to trade the stock until the suspension ends. The most common reason for a suspension is inaccurate financial information. Once the company posts up-to-date financial statements, they will be in compliance with the SEC and investors can resume trading.
In addition to the SEC suspension, some companies have halted trading. This week, surveillance equipment maker Beijing Hanbang Technology Corp. and paint seller Suzhou Sunmun Technology Co. suspended trading after the stocks plunged almost 15% and 13% respectively. Meanwhile, HNA Group Co., a publicly traded company, has also suspended trading with the T12 code. This suspension will be effective for five days. The company has requested that investors not sell their shares to protect themselves from the possible consequences of a margin call.