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Tuesday, August 07, 2012 11:23:08 AM
A DTC Chill are basically trading restrictions placed on a security by the DTC.
The majority of securities with a DTC Chill are microcap's. And, it's important to note that companies subjected to a Chill may have never violated the law. There only "crime" is that they are trade in a market that has historically been rampant with fraud.
Here's a great summary of why microcaps have a high probability of a Chill (directly from Chairman Schapiro):
“Microcaps and the OTC market present increased risks to investors that the SEC has a deep interest in monitoring. Indeed, the microcap market has been prone to fraud and manipulation, most often in the form of pump-and-dump schemes. These continuing incidents of fraud are detrimental to the market and investors, and are a serious concern which is, of course, why the SEC created the microcap fraud working group, to try to focus our efforts on combating microcap fraud and strengthening this marketplace.
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