An unauthorized collection of the records of Alternate Energy Holdings, inc., its principals and subsidiaries, and their antics, trials, and tribulations

Former AEHI CEO Don Gillispie

Former AEHI CEO Don Gillispie
OK, everyone, I've got to step out for just a minute. I'll be right back, I promise!

Tuesday, December 14, 2010

SEC Trading Suspension- What Does It Mean?

Lots of questions arise from today's action by the Securities and Exchange Commission to suspend the trading of Alternate Energy Holdings' stock.  Luckily, the SEC has a webpage with answers to some of those questions.  Some highlights from that page:

When can the SEC suspend a stock from trading?
When it serves the public interest and will protect investors, the SEC may suspend trading. For instance, the SEC may act when public information about a company is not current, accurate, or adequate. The SEC has acted when serious questions arose about a company's assets, operations, or other financial information.

What happens when the ten-day suspension period ends? Will the SEC issue a statement about the status of the company after the suspension has ended?
No. The SEC will not comment publicly on the status of a company when the ten-day suspension ends because the company may still have serious legal problems. For instance, the SEC may continue to investigate a company to determine whether it has defrauded investors. The public will not know if the SEC is continuing its investigation until the SEC publicly announces an enforcement action against the company.

Will trading automatically resume after ten days?
It depends on the market where the stock trades. Different rules apply in different markets.
For stocks that trade in the OTC or the over-the-counter market, trading does not automatically resume when a suspension ends. (The OTC market includes the Bulletin Board and the Pink Sheets.) Before trading can resume for OTC stocks, SEC regulations require a broker-dealer to review information about a company before publishing a quote. If a broker-dealer does not have confidence that a company's financial statements are current and accurate, especially in light of the questions raised by the SEC, then a broker-dealer may not publish a quote for the company's stock.
In contrast to OTC stocks, stocks that trade on an exchange or Nasdaq resume trading as soon as an SEC suspension ends.

If the suspended stock resumes trading, why is it trading at a much lower price?
The trading suspension may raise serious questions and cast doubts about the company in the minds of investors. While some investors may be willing to buy the company's stock, they will do so only at significantly lower prices.

Why would the SEC take such action when it knows it will hurt current shareholders?
Because a suspension often causes a dramatic decline in the price of the security, the SEC suspends trading only when it believes the public may be making investment decisions based on false or misleading information. Suspensions give notice to current and potential investors that we have serious concerns about a company. A suspension may prevent potential investors from being victimized by a fraud.

If there is no market to sell my security, what can I do with my shares?
If there is no market to trade the shares, they may be worthless. You may want to contact your financial or tax adviser to determine how to treat such a loss on your tax return.

Where can I get information about trading suspensions?
You can find a list of companies whose stocks have been suspended by the SEC since October 1995 on our Web site.


1 comment:

  1. Excellent insight Dude!

    The mistatesman's "Environmental" reporter Rock Barker himself was given specific and careful information which provided unique insight into the workings of this company years ago but chose to ignore the obvious and print a comparably glowing report on AEHI.

    Also, of note someone at the misstatesman also funneled what is supposed to be confidential information directly to the chief AEHI hatched man Martin Johncox. I hope the person who was feeding information back to AEHI is also exposed before this is over.