Grey Market or Grey Sheet Q & A

[Cassandra]

Is "pulling certs" a good idea for a suspended/grey market stock? NO!!!

A stock promoter is advising shareholders of SRGE (a company suspended by the SEC on 12/28/12 and will re-open a GM stock on 1/14/13) to pull their stock certificates from their brokerage accounts and hold them in paper form.

IMO, this advice should be considered criminal. There is absolutely nothing to be gained by a shareholder from taking such action, but everything to lose. Paper certs are completely illiquid. With a grey market stock suspended by the SEC for possible fraud, it is likely that the paper cert will never be accepted for deposit by a broker so that the shares can be sold. In other words, shareholders could lose the ability to ever sell their stock.

Anyone suggesting that shareholders pull their certs from a stock under SEC suspension is likely trying to eliminate competition from selling the stock when it opens on the grey market so they can get as high a price as possible when they sell.