The SEC ordered a temporary suspension of trading in the securities of Custom Protection Services, Inc. ("CSPS") due to potential inaccuracies regarding the company's asserted development of screening solutions for COVID-19.
In a release issued on May 5, 2020, the SEC said that the suspension in trading was the result of concerns raised in connection with: (i) statements made by CSPS in press releases concerning the development of screening solutions; (ii) the substantial response CSPS received for the screening solutions; and (iii) CSPS' estimates of the potential gross revenue from new contracts.
The suspension began on May 6, 2020, and will conclude on May 19, 2020.
Commentary
The SEC has used its suspension authority aggressively since the onset of the COVID-19 crisis and has already suspended trading in the securities of more than two dozen companies due to issues with the adequacy and accuracy of information in the market related to COVID-19. The SEC is likely to continue to make aggressive use of its suspension authority throughout the crisis and will likely pursue enforcement actions against some of these companies for false statements made related to COVID-19.
Primary Sources
Originally published 8 May 2020
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