What happens after SEC revokes the registration of a stock?
What happens after SEC revokes the registration of a stock?
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TJNI4fmgOSiB2yFX · External communityPost link
External question — Personal Finance Stack Exchange
Author: TJNI4fmgOSiB2yFX
Original post: https://money.stackexchange.com/questions/144715
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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Looking at
United Development FUnding Income Fund IV
(which was a listed REIT on Nasdaq which subsequently traded OTC):
This security had its registration revoked by SEC on 2020.08.13,
according to last page of
https://www.sec.gov/litigation/opinions/2020/34-89535.pdf
However, on 2021.09.23, UDF says
United Development Funding IV (“UDF IV”) announced today that on August 9, 2021 its board of trustees authorized a cash distribution
of $0.065 per share
(Link
http://www.udfonline.com/united-development-funding-iv-and-united-development-funding-income-fund-v-announce-distributions-aug12/
)
Q1 - What happens after a security registration is revoked by SEC? (I was surprised that, there can be cash distributions for a security which has its registration revoked.)
Q2 - Separately: SEC
says
Broker-dealers may not execute any trades in stocks whose registration has been revoked pursuant to Section 12(j).
I guess this means existing shareholders can still trade with counterparties other than broker-dealers?)
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exchangetech · External communityPost link
External answer — Personal Finance Stack Exchange
Author: exchangetech
Original post: https://money.stackexchange.com/a/144752
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
Q1. Based on this
article
"Once registration has been revoked, the stock’s ticker will be deleted. Shareholders will still be shareholders but in a private company. Their stock will be extremely illiquid, and its value will be difficult to determine, as there is no public market for it."
Q2. Correct, broker-dealers may not execute any trades resulting in the stock to be very illiquid and the chances that broker-dealers execute stocks of those kinds are 50/50 chance.
There are changes though taking effect on the OTC markets coming September 28th. More information
here
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: TJNI4fmgOSiB2yFX Source score (net votes, not local likes): 0 Original post: https://money.stackexchange.com/questions/144715 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Looking at United Development FUnding Income Fund IV (which was a listed REIT on Nasdaq which subsequently traded OTC): This security had its registration revoked by SEC on 2020.08.13, according to last page of https://www.sec.gov/litigation/opinions/2020/34-89535.pdf However, on 2021.09.23, UDF says United Development Funding IV (“UDF IV”) announced today that on August 9, 2021 its board of trustees authorized a cash distribution of $0.065 per share (Link http://www.udfonline.com/united-development-funding-iv-and-united-development-funding-income-fund-v-announce-distributions-aug12/ ) Q1 - What happens after a security registration is revoked by SEC? (I was surprised that, there can be cash distributions for a security which has its registration revoked.) Q2 - Separately: SEC says Broker-dealers may not execute any trades in stocks whose registration has been revoked pursuant to Section 12(j). I guess this means existing shareholders can still trade with counterparties other than broker-dealers?)
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