Caveat Emptor securities set to liquidate-only by January 31, 2021
Earlier today we sent you an email. While all of the other information was correct, it contained an incorrect phone number which we have corrected below. Please accept our apologies.
By January 31, 2021, Charles Schwab & Co., Inc. (“Schwab”) will restrict orders in Caveat Emptor designated OTC securities to liquidating trades only. Closing trades will continue to be allowed after this time.
Why is this change happening?
A Caveat Emptor security is a designation the OTC Markets Group places on a security after a determination was made surrounding the company that there may be potential risk to investors which may include:
• a potentially misleading or manipulative stock promotion,
• known investigation of fraudulent or criminal activity committed by the company or insiders
• regulatory trading suspensions or halts,
• disruptive or undisclosed corporate actions, and/or
• other reasons related to the public interest.
Caveat Emptor securities have the potential for illiquid and highly volatile conditions. A skull and crossbones icon is placed next to the stock symbol.
We are notifying you as you may have traded in or held positions in securities of this type within the past 12 months.
What does this mean for your account?
By the end of January, any positions held that are impacted by the Caveat Emptor designation will be set to liquidating transactions only and no opening transactions will be allowed for these securities. Any existing opening orders will be canceled but you may close out any open positions or continue to hold. You will not be allowed to add any new positions in these securities unless the Caveat Emptor designation is removed by OTC Markets Group.
The current list of impacted securities (which is subject to change) can be found here.
Thank you for investing with Schwab. If you have any questions please call us at 1-800-435-4000 Monday through Friday, 8:30 a.m. to 4:00 p.m. ET. For clients of investment advisors, please call your advisor directly or call Schwab Alliance™ at 1-800-515-2157. If you’re calling from outside the U.S., please call +1-415-667-8400.
