SEC Suspends trading in Sovereign Lithium Inc $SLCO

Disclosure: I am short SLCO.

The string of suspensions of promoted stocks during the promotion or soon after continues with the SEC suspending trading in Sovereign Lithium Inc. (SLCO) last Friday. Judging by postings on InvestorsHub and Twitter, there was a new mailer promoting SLCO sent by James Rapholz’s Economic Advice. Despite the new ticker and name and mailer pump, the company has been around and was the subject of a mailer pump under the name Great American Energy and ticker SRBL starting back in February 2013.

Here is a chart showing the recent re-pump of SLCO:

slco_3mo

And the chart below shows the previous pump as well:

slco_11mo

 

While the SEC’s trading suspension press release included the usual language about “concerns regarding the accuracy and adequacy of information in the marketplace” it also highlighted “potentially manipulative transactions in Soverign Lithium’s common stock,” which is something rarely mentioned in these releases. The recent excellent article on TheStreet.com about promoter Awesomepennystocks.com (APS) mentioned that FINRA had sent “fraud surveillance section referral reports” to the SEC on numerous APS pumps. Perhaps after its slowness to act on the APS pumps came to light the SEC has decided to take a much closer look at manipulative trading in penny stock pump and dumps. If that is the case we should see a bunch more suspensions soon, likely including Pan Global Corp (PGLO).

 

From the trading suspension release:

The Commission temporarily suspended trading in the securities of Sovereign Lithium because
of concerns regarding the accuracy and adequacy of information in the marketplace and
potentially manipulative transactions in Sovereign Lithium’s common stock.

 

SEC trading suspension release (pdf)
SEC trading suspension order (pdf)

 

Disclaimer: I am short 2153 shares of SLCO at Interactive Brokers that I intend to cover soon after the stock reopens for trading. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

5 thoughts on “SEC Suspends trading in Sovereign Lithium Inc $SLCO”

  1. Thanks for sharing the information! Nice due diligence! What price per share do you expect to see when SLCO resumes trading again on Nov. 29 noon time?

    1. It actually won’t begin trading until the open on December 2nd. It is through 11:59pm on November 29th so it won’t trade until the open on the next trading day. I expect a gap down of 70% although I would not be surprised by a 50% or 90% gap down (more likely 50% than 90%).

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