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Securities Trading Halts, Delays, and Suspensions

The Securities and Exchange Commission may suspend trading in a security for up to ten days. Securities exchanges such as the New York and American Stock Exchanges and Nasdaq may delay trading in a security at the beginning of a trading day or halt trading in a security during the trading day.

Suspensions

The Securities and Exchange Commission may decide to halt trading in a company’s securities for up to ten days. Following the suspension, the Commission may continue to investigate the company and may file an enforcement action against the company. However, trading in the security resumes if the security is traded on an exchange or Nasdaq. For other securities that are traded in the over-the-counter market through entities such as the Bulletin Board and the Pink Sheets, broker-dealers are barred by Commission regulations from publishing quotes for a company’s securities following a suspension without first determining that the company has provided current and accurate financial statements.

Suspensions may be ordered by the Commission if it has questions about a company’s financial information or its assets or operations. The Commission may suspend trading in the company’s securities if public information about the company is inaccurate or inadequate or is not current.

Trading Delays and Halts

Exchanges and Nasdaq may call a trading delay (also termed a delayed opening) at the beginning of the trading day for a security on which there is an imbalance between buy and sell orders or if important news is expected for the company that issued the security. The exchanges and Nasdaq also may call a halt to trading in a security during the trading day, usually for no more than an hour, to allow specialists to correct a significant imbalance in buy and sell orders or to allow the market to absorb news about the company that issued the security.

Delays or halts due to impending company news are considered regulatory delays or halts. Delays or halts due to questions arising about continued ability of a security to meet listing requirements also are termed regulatory delays or halts. On the other hand, delays or halts due to trading imbalances are termed non-regulatory.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

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