My brokerage firm canceled my buy order this morning for GreenShift shares. They said there was a "Global Lock" on the shares where they could no longer accept buy orders for the stock . They said they could not receive them from the transfer agent. Obviously some shares are still trading, while others on the boards have reported similar problems. I will update as I get more information.
SkunK
Wednesday, December 8, 2010
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GLOBAL LOCK ISSUES
When an issue is designated as global
lock at DTCC it is not eligible for
delivery, transfer or withdrawal. There
is a variety of reasons for global lock
designation but the incidents of greatest
impact and hardest cases to resolve
involve allegations of fraud at an
issuer or agent or some other type of
irregularity that makes the validity of
deposited certificates suspect. While
these restrictions on position movement
are understandable given the underlying
problems with the issuer, a set of
other problems spring forth that the
committee addressed to DTCC. A
meeting was coordinated with appropriate
DTCC subject matter experts to
discuss issues and determine solutions.
The following is a summary of discussion
topics and responses related to
the subject.
How many global lock issues exist?
Approximately 3500 issues are in
global lock at DTCC. Many carry a
temporary designation placed on the
issue due to upcoming corporate
action – most are resolved within thirty
days. These issues are not the focus of
concern to the participants.
What is the financial/capital charge
impact to participants?
The greatest impact is related to a
small number of issues that affect street
side settlements. These issues cause
between $2,000,000 and
$8,000,000 in capital charges per
participant firm on a monthly basis –
according to respondents to an SOD
survey.
Is immediate notification important?
Immediate notification is a key
because it signals the Operations
groups that charges can be reduced if
fails that existed before a trading halt
are identified and reported to the
SRO. Also, brokers can immediately
move to ensure trading and validation
of ACAT’s is ceased in the issue, thus
limiting the creation of new fails that
cannot be settled.
How quickly and through what channel
can notification of “global lock” be
provided?
While pre-notification cannot be provided,
a method to provide notification
immediately is possible. DTCC will
investigate a solution and report back
to the committee.
Can a hot sheet be published with
periodic updates on resolution status?
Understanding the nature of the
issuer’s problem and having a resolution
timeline is helpful. However, due
to the nature of the underlying problems
with the issue it is rare that a significant
update can be provided.
Litigation and investigation may be
ongoing and details may not be
disclosed. It is important to note that
the issuer, the agent or SRO must take
action to resolve the problem. DTCC
cannot take action and is rarely in
possession of material updates. DTCC
will explore developing a tracking
mechanism for hot issues, however.
Can RECAPS be a solution?
RECAP processing allows firms to submit
failed to settle contracts to the
depository for reconfirmation. A new
contract with a current marked to the
market contract value and current
settlement date is produced. This
reduces aged fails to less than thirty
days old which reduces capital
charges. There are a couple of
impediments:
Some trouble issues carry a “corporate
action” indicator in the DTCC system
because a suspect corporate action
has been announced by the firm or
its agent. Once an issue carries the
corporate action flag on DTCC’s
security master it is excluded from
RECAPS. DTCC will explore allowing
participants to indemnify them on
suspect corporate actions to facilitate
RECAPS. DTCC will respond back to
the committee.
Since RECAPS is run on a quarterly
basis there is a two month period
where aged fails will exist on the
participant’s books before the next
cycle is run. These fails are subject to
capital charges. It was proposed that
DTCC run a monthly RECAP cycle in
their new, streamlined system.
DTCC questioned if there is enough
volume of non-CNS fails to justify
running a monthly recap cycle. DTCC
will investigate and will report back to
the committee on feasibility.
Continued on next
Nobody12378 Can you speculate on what you think?
Email sent to SEC, as of yet no response. Also see Raging Bull
"tradingandmarkets@sec.gov"
Subject: Global lock on GERS
Dear Sirs:
I have been informed by three brokerages (USAA, TD Ameritrade, and Scottrade) that there is a global lock on GERS stock. Yet, according to public data millions of shares are still being traded each day. How can this happen?
I was told by Ameritrade and Scottrade that the global lock was only on electronic trades, to purchase. They said shares could be purchased if they were physical hard paper shares.
He said that Greenshift is the one that's not allowing electronic trades of it's stock, "only solid stock certificates can be traded at this time." The trades won't go through, since Ameritrade operates on an electronic platform.
The question is, how does one go about buying solid stock certificates?
And how will the short/naked shorts cover if they're unable to buy the shares back?
Ameritrade said that a pending merger, buyout, or restructuring could be the reason for the inability to buy stock in GERS right now. Does this involve the Y/A deal or something bigger like GPRE or both?
"Prefered stockholders may convert to common shares in connection with a merger."
This global lock obviously has something to do with the conversion of prefereds to common...
I had a pending "buy" order on E-Trade that was filled on 12/1, 12/2 and 12/3 AFTER this supposed electronic global lock went into effect.
Does anyone know of a broker that sells paper shares?
Ya know
if this company was bought for 10 cents a share....KK is an instant billion prior to taxation....
that would splash some news regarding this unfavorable industry sector...possible?
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