That is a result of the broker dealer not doing the first assessment correctly and inviting an issuer into the market, each party has every right to protect themselves and the market when they realize the issuer is bad. Once again, the DTCC has no regulatory or law enforcement power they are simply a clearing business and as such should not be expected to eat bad business because other entities are not doing their part.
I guess it's okay for the company to continuously issue unregistered shares into the market creating chaos and bagholders left and right then? So their actions are okay as long as people are making money, right?
I think you are missing the point of the actions being taken by the brokers and DTCC. The two are working together to stop the allowance of unregistered shares causing many people to lose their life savings because the kool-aid being passed around saying so and so company is going to do a R/M or going to make 100B $....
The OTC is where this happens and it's about damn time the system found some way of stopping this from happening.
If it happens while someone is holding the stock then it's that person's fault for not understanding the situation they are in and properly vetting the company rather than believing the hype that people tout about so and so company when it couldn't be further from the truth.
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