Sulja Bros. Stock Craters After Ontario Trading Halt
Thomas J. Catino
1/03/2007 1:44 PM EST
antandsons.com
Sulja Bros. Building Supplies Ltd. (OTC: SLJB) is starting the new trading year in the same way it ended the last one... on a down note. Shares of Sulja are lower by $.0045, or 36%, to $.008 on heavy volume of 16.99 million shares. The stock is being pressured today after the company announced that it received a temporary Cease trade Order from the Ontario Securities Commission (OSC) office that will suspend trading in Ontario of Sulja stock. A hearing will be held on January 8 to decide whether the order will be extended. Though the company anticipates commenting on the matter after the hearing because it believes investors should be "entitled to clarity and transparency," the company has thus far failed to live up to the promise of full disclosure. In the latter months of 2006, Sulja management promised shareholders audited financials repeatedly, but on numerous occasions delayed the release of those financial statements.
The corporate veil is finally being pierced, but it comes as a mighty blow to shareholders. Most disturbingly, in a statement of allegations, the Ontario Securities Commission alleges that former Sulja CEO Vucicevich, from September 2004 to August 2005, set up trading accounts at two Canadian discount brokers.
Between August 2006 and November 2006, these accounts received large amounts of Sulja shares that were thereafter sold. (Interestingly enough, during this time, the stock price reached record highs as did the daily average volume.) The proceeds of the trading in securities originating from these accounts are approximately $7.8 million.
The stain of this news on Sulja has cratered the share price into the sub penny range and has shattered the faith of shareholders who still held hope in the company and did not see the writing on the wall. For those selling on the news today, it is unfortunate you'll have to wait until next year to count this as a tax loss. However, what is even more unfortunate is the fact that it took the Ontario Securities Commission to find out what Sulja was not disclosing.
Click here for the full story on Sulja.
Full Disclosure: The author is neither long nor short the mentioned security.
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