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Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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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.