SEC weighs tightening broker-quote rule in wake of hundreds of OTC trading suspensions

11 October 2018 7:25am
The US Securities and Exchange Commission is considering whether to stiffen a longstanding broker-quote rule in an attempt to increase investor protections following hundreds of trading suspensions of penny stocks quoted under the rule.

Brett Redfearn, the SEC’s head of trading and markets, expressed concern last week that the so-called piggyback exception allows multiple brokers to quote a company that hasn’t reported recent financial information.

“If a company is a dark company and it’s listed in [over-the-counter] markets, and it hasn’t put out any financials for over six months or a year or even longer, maybe it shouldn’t be quoted!” Redfearn said at an industry conference.