So I have a kwestshun for/four/4/fore! the DD Fraud Bored securities lawyers.
Financier-creditors (Longside et al.) of NTEK (a Nevada corp domiciled in California) have been unable to collect on their settlement with NTEK relating to around $1.5 million in a Florida state court action. Longside has previously moved for, and received, court orders requiring NTEK to provide financial information and banking records. NTEK has simply ignored these court orders.
Now Longside has moved requesting the state court to order a suspension of trading of NTEK stock until the prior court orders are complied with. Longside has nott indicated in their motion to whom such a court order would be directed; they simply request the court to order a suspension of trading without further details.
To my untrained eyes, I am nott aware that a state court can enforce a suspension of trading of a stock outside the borders of the state, if at all. I similarly do nott understand the mechanism by which a state court order can effectuate a trading suspension of a publicly traded stock. Perhaps it can issue a court order directed at FINRA, butt I don't see how FINRA can be made to comply with that order.
So, to my non-securities lawyer brain wiring, I'm guessing that this motion is simply a means to gett the court to take some further action and renew the court's notice of NTEK's ignorance of the prior court orders; and that action may be something other than an order to suspend trading. Perhaps the objective is to have the state of Florida Division of Securities Regulation to take an administrative action against the TA (ClearTrust, a Florida corporation).
At most, in my guessing here, my guess is that the Florida court could order NTEK to itself effect a suspension of trading of its stock (e.g., by requesting FINRA to halt the stock) or to order the transfer agent (a Florida-domiciled entity, ClearTrust) to cease share transfers. In the former instance, I'd expect NTEK to ignore the court order, as it has done with the prior court orders to enforce the settlement. In the latter case, I'd expect ClearTrust to object to any such order and take action both in state court (and perhaps the state appellate court) and possibly Federal court to oppose such court order.
Can one, or preferably more, of the securities lawyers on DD Bored please assplain to me whether a state court has jurisdiction to order a publicly traded stock, traded both inside and ~OUTTside of the state, to cease trading. And, if so, what are the mechanism(s) available to effect such a trading suspension.
I am unaware of any state court that has issued an order which resulted in the suspension of trading for the stock of a foreign corporation, even those which are doing business within the state (which is the case with NTEK).
Since the Longside motion does nott address the specific elements of the requested cease trading court order, I'm left guessing about this matter. So your assplanashuns are requested and would be most welcome.
