Take Precautions following an SEC
Trading Suspension:
Check for Reliable Information.
Investors should be very cautious in considering an
investment in a stock following a trading suspension.
At the very least, investors should assure themselves
that they have current and reliable information about a
company before investing.
Research the Company: Always research
a company before buying its stock, especially
following a trading suspension. Consider the
company’s finances, organization, and business
prospects. This type of information often is
included in filings that a company makes with the
SEC.
• Review the Company’s SEC Filings: This
information is free and can be found on the
Commission’s EDGAR filing system. Some
companies are not required to file reports with
the SEC. These are known as “non-reporting”
companies. Investors should be aware of the risks
of trading the stock of such companies, as there
may not be current and accurate information
that would allow investors to make an informed
investment decision.
• Be Skeptical: Investors should always ask why
someone provides them a “hot” tip. Investors
should also do their own research and be aware
that information from online blogs, social
networking sites, and even a company’s own
website may be inaccurate and sometimes
intentionally misleading:
If current, reliable information about a company and
its stock is not available, investors should consider
seriously whether this may be a good investment.
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