The significance of the trading halt ordered by the SEC:
The SEC often investigates companies and stocks, but rarely does it announce that it is doing so. Usually it does not acknowledge or deny the existence an investigation. Even the company itself usually becomes aware of an investigation only when the SEC requests information from it, and thereafter the company often doesn't learn what the outcome of the investigation is, or even if the investigation is still going on. That's the normal process.
NCDR was handled differently, and the reasons are well worth knowing.
A trading halt is essentially a mechanism for the SEC to announce, to all investors, that it is investigating the stock and the company, and announcing which specific questions it was asking the company. In the case of NCDR, it was also a way for the SEC to announce to investors, in a rhetorical manner, that the reputation and background of the person who is CEO/President should be of great interest to them.
The SEC could have chosen to investigate in the usual, quiet manner, and ask the company the same questions without publicizing it.
Instead, the SEC chose to announce the questions not just publicly, but in a very dramatic public way.
This unusual action by the SEC reflects what we can only assume is extreme concern at the SEC about this company, and about its CEO/President. |
