Halt trading in old GM shares alreadyPosted Jul 16th 2009 11:00AM by Zac Bissonnette
Filed under: General Motors (GM)
tweetmeme_source = 'BloggingStocks';Onething that's been bothering me lately is the fact that shares of theold General Motors continue to trade with tremendous volatility --interesting given that the shares are guaranteed to be worthless.
New York Post columnist John Crudele is
bothered by it too. He took the time to ask an SEC spokesperson why the commission doesn't just go ahead and halt trading in
MTLQQ -- the ticker symbol under which GM now trades as
Motors Liquidation Company.The response was classic bureaucratic barf: "The federal securitieslaws are designed to ensure that there is complete and accurateinformation about registered securities, not make judgments about themerits of any particular investment. Holders of GM stock are entitledto sell their shares and others are entitled to buy them."
Thatline of reasoning is so wrong in this case that it's not even funny.The SEC has to balance the need for regulation with the interests ofpromoting a free market: Since GM shares are worthless, the only reasonthat anyone would want to buy them is that they are misinformed,ignorant, or just plain stupid. People profiting from selling GM sharesare trading worthless stock to people who don't understand how it works.
Addingto the confusion is the fact that there is tremendous media coverage ofthe turnaround at General Motors, and the company's executives arewaxing like a drunken uncle at Thanksgiving about the new company'sprospects. A naive investor might look up the company and find sharesof General Motors trading for less than a dollar and figure what theheck?
The issue here is that there is no benefit to allowing GMshares to be traded freely and a tremendous potential for theexploitation of naive investors by boiler room-type charlatans.
Majorprops to Mr. Crudele for pointing this travesty out and a memo to theSEC: Halt trading in GM before more people lose money for no reason.
Tags: featured, General Motors, GeneralMotors, GM
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