The SEC has said it before, many times. Their job is not to protect shareholders from themselves. The information any one needed to determine if NEWC was a worthy investment was contained in the SEC filings (or lack thereof). Once they stopped filing, it should have been a clear message that NEWC was no longer, under any circumstances, a worthy investment, and the stock was subject to revocation of its registration at any time. Which is what ultimately happened, but only after previously losing the majority of its value as smart investors dumped the stock. Something is always better than nothing, which is what any long ended up with once the stock was revoked.
Actually, everyone should have dumped the stock the instant NEWC sold its first toxic death spiral convertible. They are guaranteed to kill every single company that issues them. EVERY SINGLE ONE. From that point forward it was only a question of when the stock would die and go completely worthless, not if.
I know it sounds harsh, but that is the way it works. Do I think Campo played fair? Absolutely not. But shareholders had plenty of time to bail out before the stock went worthless. No one is going to get their money back on this one, but hopefully shareholders learned two expensive lessons that will help them in the future:
First, never buy shares of a Company that is not reporting to the SEC. That includes both non-SEC registrants AND SEC registrants that are delinquent.
Second, never EVER buy shares in a toxic death spiral issuer. Common shareholders are guaranteed to lose, and the stock will eventually die. They all do.
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