Dear Valued Client,
The U.S. Securities and Exchange Commission ("SEC) recently approved amendments to rules regarding investor protections when trading in Over the Counter ("OTC") securities. One potential impact of these rule changes is that when current information regarding issuers' financials is not available, and/or quotations are also unavailable, such securities may be designated as Caveat Emptor ("buyer beware"). These changes have the potential to create conditions where the security is difficult to sell or trade.
Effective May 25, 2021, TD Ameritrade will restrict orders in Caveat Emptor-designated securities to liquidation only. Only closing orders will be accepted after this time and existing orders to open new positions will be canceled. We are notifying you as you may have traded in or held positions in securities of this type within the past 12 months.
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. Caveat Emptor securities also have the potential for illiquid and highly volatile conditions.
Some of the potential risk factors 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.
The current list of impacted securities (which is subject to change) can be found here.
Have Questions? Need Any Help?
We're here for you. Just reply to this message to write us, we're available 24 hours a day, seven days a week.
Sincerely,
TD Ameritrade Client Services
*The list of Caveat Emptor securities is subject to change at any time.
