Not really.every time there's an investigation done that means you know all the paperwork and all the news releases all real. It happens to a lot of companies
When the SEC suspends a stock you are invested in it can be a very emotional and even sickening experience. The first reaction for me was it was not fair and the SEC was somehow mistaken. Then to have to wade through all the posts trying to figure out what is truth and what is fiction. I have been through a suspension and have followed many others since. This is what I can tell you based on facts and experience from the day of suspension to the first day of trading to what you can expect long term. This is reality.
Don't believe anything the company tells you or especially what somebody might claim came from the company. None of it matters. The SEC action is what it is. The SEC has already done it's investigation. The suspension is not a mistake and will not be quickly resolved. It's game over.
There will be allot of misinformation on the boards and most of that it is down right wrong. If you hear someone say they talk to the SEC and they said that it would all be cleared up soon or in a few days…They are lying to you. The SEC NEVER comments on a suspension EVER. This stuff mainly comes from folks that are looking to keep people from selling first thing so that they themselves can be the first one's out. That's what makes sense.
I have heard it all. Even some saying that the suspension is a good thing for reasons like that there will be no more MM games or the shorts are done or that the company will now need to file financials or that this company is somehow special. All ridicules. Reality is that it's way to late now. It's all not true. A SEC suspension is NEVER a good thing. The stock WILL remain on the grey market until the SEC clears it with the conclusion of it's investigation. That is also very unlikely to happen. The SEC has a pretty good record for these suspensions. I have never heard of one being a "mistake" or that they will soon clear us". It just does not happen.
The reason the SEC takes a action like a 10 day trading suspension is to protect FUTURE investors. Not you. It's to late for you. Nobody but yourself could protect your money up till this point. Penny stocks are full of cons and scams you should have been aware of that. Now that there as been a suspension by the SEC and the stock is relegated to the grey's. Future investors will be aware that it is very risky to invest in the stock and it will and does effect volume. Volume will gradually drop off to almost nothing after a few weeks or months. Liquidity will became a REAL problem.
When the SEC takes this action it means that when trading resumes in 10 trading days that the stock WILL open on the grey market. When trading on the grey market there will be no L2 and no bid/ask. The stock will be trading blind and the trades of buys and sells will need to be matched by size and price per share. There will be NO market makers to provide liquidity and help with matching trades.
Form 211 A market Maker will need to file a Form 211 with FIRNA to get of the Grey Market. Don't believe all the hype about that from anybody, the company included that it will happen soon or in a few weeks. It NEVER does... EVER.
For the first few days and if you are lucky.. A couple of weeks, trading on the greys will have some good volume. My opinion of the suspended stocks i have watched has been to sell early and put it behind you has the odds of the PPS going higher than before it was suspended are very slim. There will actually be some buyers. They are true believers trying to averaging down and then there are some that will try to play a bounce from a extreme low. If you are hearing that you will be getting a PR with great news…Forget it. It never comes. Most of these CEO's of suspended stocks have enough sense to keep their mouths shut. At least in anything that can be documented. There is no good outcome from a SEC suspension.
When trading in the Grey Market you will need to think like a buyer. The trades need to match by price and size. So use smaller round numbered lot's. like 5,000 not 5,675 and 100,000 for like .005 stocks. When i sold i used the "all or none" on my trades because i did not what to be left hanging for hours. But sold in smaller lots of different sizes and slightly different prices. With good volume they went pretty quick. Buy the way that was Act Clean during the Gulf oil spill in June 2010 and i managed to recoup 30% of my money and as it turned out was lucky to get that. the post are there for all to see. It was not a good time and i felt i got the shaft by the SEC. It did not turn out well at all for those that held. Looking back now i learned allot about trading penny stock since then. It's trading you should be doing with these not investing. Buy'em Sell'em.. move on.
The reason why I am posting this...
It is definitely NOT because I want cheap shares. I will NEVER buy a Grey Market SEC suspended stock. It's because allot of folks read these boards but don't post much and somebody needs to put out some real info. Not a bunch of wishful thinking, delusion, hope and dreams. I learn allot from some here on I-hub and in my research. I don't like seeing shady CEO's and promoters taking advantage of us little retail guys. If it is to good to be true…It is. Ask or look for conformation. The best we got with these publicly traded stocks is filings research and are own intuition.
To learn more about Grey Market trading you can look here...
How many stocks come back from a SEC suspension? Not very many at all. Look at these statistics compiled by Renee..
To get off the Grey Market the company will need the all clear from the SEC and the company will need CURRENT AUDITED FINANCIALS for a Market Maker to file a form 211. The process could take years. A Market Maker will NOT TOUCH a stock that is still under SEC investigation. EVER.
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