What does the SEC do when a company first appears on Reg SHO list?
The companys stock should IMMEDIATELY go on RESTRICTIVE TRADING to prevent the stock counterfeiting problem from worsening. Restrictive trading means NO OPTIONS TRADING and NO SHORTING until the failed trades are fully settled. It is absurd to allow these prime brokers to allow phony locates when the CNS system clearly indicates that there are outstanding failed trades. If dealt with at an early stage, there should be no significant short squeezes. Restrictive trading should last a minimum of thirty days while all failed trades are settled. This period should be followed by at least another thirty days of carefully monitored PROBATIONARY TRADING. The goal would be to insure that the company does not wind up back on the Reg SHO list. Meaningful penalties should be levied by the DOJ against participants who have violated settlement rules. There should be assurances and transparency that the fines that are levied are actually collected. Problem number two: How does the SEC settle the fail
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- What does the SEC do when a company first appears on Reg SHO list?
