Quickly -
A DTCC "chill" effects new issuances only. DTCC normally will only issues a chill on a stock to stock basis. Very rare indeed to actually issue one for the a TA. Historically, TA's in Ontario and BC have had various issues with both DTCC and SEC...so basically, they are looked at with greater suspicion that one would expect from both DTCC and SEC.
So what does a chill mean for shareholders?
Well, let us look at what a chill does / create:
1. The company cannot issue new stock in a normal manner
2. The stock is non deliverable
3. DTCC believes that stock might have been issued incorrectly or questions the methods stocks have been issued. So on a going forward basis, on new issuances will have to be done manually and hand delivered to DTCC making the process very time consuming (typically typically 4 - 6weeks)
4. Any stock in the system (Cede & Co - street name) is fine. You can still trade the stock. Based on some of the responses on the boards, there seems some issues on a broker to broker basis, that I cannot address.
5. Traditionally, stocks do not get halted once in chill status. Chills typically only effects stocks on a going forward basis with respect to new stock issuances.
Is CNEX or any of its employees being charged with anything directly or is this just wheeler?
IMHO - DTCC and SEC are two separate bodies and DTCC cannot nor if they could will comment on any ongoing investigation....and I believe that this time, no one can know until they are finished their investigation. One thing we should all know about the SEC is that they roll slow but they roll hard. Basically, it can be a couple years before you know the final outcome.
Is this ban for the cease and desist on the T/A temp,or perm.
Well it can be both. The TA has retained counsel, so basically if it provides sufficient information and comply with all the requests by the DTCC the cease and desist in theory can be removed. However, the reason(s) the cease and desist was put in place was for missing records. So this can be a tricky one.
What one must be concerned with is can CNEX changed TAs if this TA can no longer do business. This issue can get tricky. Typically, when a company wants to change TAs one of the items that needs to be transfered over is a Shareholder list. If GSE has not kept good records this can prevent changing TAs. This is one of the many possible issues.
3)How will this affect the shareholders of cnex.
You can look at this point in a couple different ways:
a. GOOD -CNEX cannot issue and / or convert free trading paper. Thus, the float will not increase.
b. BAD - However, CNEX has not way of raising capital without the ability to issue shares.
c. BAD - There will be negative view from the market and any new potential investors / funders
4)Are their more charges pending from DTCC.
They will probably say, no comment or some blah blah along the lines of we cannot comment on any ongoing investigation
5)How does all the DTCC work in with the SEC as far as these implications are concerned
same as above.
What makes this interesting and troubling is that as I stated before, normally a chill is reserved for individual stocks. When you see a TA getting a cease and desist, this creates is a unique situation.
Finally, I think the real concern is more the outcome of the SEC investigation. The SEC is the only one with the power to HALT a stock.
I hope this helps - Good luck with your call with the DTCC.
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