SEC Halts Trading of Social Networking Stock That Gained 25,000%
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Regulators have halted trading of over-the-counter stock CYNK Technology, a social networking company with no revenue or members that inexplicably gained about 25,000% in recent days — and reached valuations of more than $5 billion.
According to the OTC Bulletin Board, the halt is "SEC related," and a bulletin from the SEC further explains that it has "temporarily suspended trading in the securities of CYNK because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK’s common stock." The halt will end at 11:59pm East Coast time on July 24.
Federal securities laws allow the commission to suspend trading in any stock for up to ten days when the SEC "determines that a trading suspension is required in the public interest and for the protection of investors."
Earlier today Business Insider reported that the OTC Bulletin Board classified the halt as U3, which is when FINRA determines an "extraordinary event" is affecting the market for a security. As of 9:30am, the halt was reclassified as H10, an SEC trading suspension.
Watch the video below to see Money editor Pat Regnier explain why you should watch out for stocks like CYNK.