It's questionable whether it is legal: I'm not a securities lawyer, but basically you have a company that doesn't exist anywhere other than on paper trading. It's trading as an unregistered security, so is it really trading legally? I imagine the SEC's argument is something along the lines as to trade as a publicly traded company, you should be a registered, fully reporting company; you cannot be a registered, fully reporting company if you aren't a real company. Unregistered securities have been the bane of the SEC and clearing firms for a decade or so due to penny scams - so, by cutting off unregistered securities, you can cut off the headaches involved with most penny scams.
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