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Featured Advisor

Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

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Tips for Investors Considering Suspended Stocks

Stock trading suspensions can signal trouble within targeted companies. How can investors cope?

| BY Adriana Reyneri

The U.S. Securities and Exchange Commission, the federal agency charged with ensuring fair and orderly markets, can suspend trading of a company stock for up to 10 business days.

The suspensions are designed to protect investors from undue risk and are typically imposed when a company fails to file quarterly or annual reports providing investors information about is financial performance and outlook, according to the Financial Industry Regulatory Authority.  Publicly reported information that appears to be inaccurate and has the potential to manipulate markets may also prompt the SEC to halt trading.

The SEC will inform the public of its decision to suspend trading of a company stock and will publish the dates and reasons for the suspension, including when the company last filed public reports, on its website.

Investors should exercise caution when purchasing a stock after an SEC suspension ends, according to FINRA, which regulates the brokerage industry.

“Be aware that the SEC’s ability to continue a trading suspension indefinitely is strictly limited,” FINRA said in a statement. “As a result, the lifting of a trading suspension does not mean that the SEC’s concerns have been addressed and no longer apply.”  FINRA recommends the following tips for investors considering a stock subject to an SEC suspension:

·         Ask your broker to report the information it has on the company, and to reveal how recent the information is. Most SEC suspensions relate to a failure to provide current, reliable information.

·         Perform independent research on the company, and carefully analyze the information.

·         Take into consideration any potential problems selling the investment. Stocks of some companies subject to suspension can be fairly illiquid.

·         Exercise extreme caution over stock offers that do not include current information about a company.

U.S. exchanges, including the NYSE and NASDAQ, may also temporarily halt trading of a listed stock when the company is experiencing a major event that could affect trading activity. Companies are required to report these events, including corporate restructuring, damaging information about a project or legal action, to the exchanges before they announce them to the public. The short-term suspension allows the information to be widely disseminated to all investors, FINRA said.