Law360 spoke to Securities and Capital Markets Partner, Margaret K. Rhoda, about what companies should consider now that the U.S. Securities and Exchange Commission has recently approved rules proposed by Nasdaq and the New York Stock Exchange to accelerate the delisting of stocks that trade below minimum requirements.
With these rules, which took effect in January, the exchanges narrow the options for companies to regain compliance with the minimum price listing requirements. Rhoda was quoted as saying “The exchanges are focused on companies that are repeat offenders. Part of this is a cleanup method for the exchanges in trying to get companies to, from their view, behave better.”
When asked about companies struggling to maintain the minimum $1 bid price, Rhoda said, “These rules remove a lot of the tools from the toolbox. Going forward, companies are going to need to think very carefully about what they can do and when they do it.”
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