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It’s been several days since the Financial Industry Regulatory Authority (FINRA) suspended the trading of Meta Materials Preferred Shares (MMTLP). However, the move is still fresh in the memory of MMTLP stock holders. FINRA explained it had imposed halt code U3, which carries the definition of an “extraordinary event has occurred or is ongoing that has had a material effect on the market for the OTC Equity Security or has caused or has the potential to cause major disruption to the marketplace and/or significant uncertainty in the settlement and clearance process.”
Meta Materials (NASDAQ:MMAT) had previously announced that MMTLP would cease to trade tomorrow, Dec. 13. Shareholders with settled shares as of Dec. 12 would receive one share of Next Bridge Hydrocarbons for each share of MMTLP owned. Next Bridge would operate as an independent public reporting company and its shares would not be tradable.
This hardly seems fair for shareholders, with many speculating FINRA may have imposed the halt to protect short sellers. On social media, investors have argued these short sellers would be forced to cover their positions before MMTLP was taken off the market, which could have driven prices higher.
Now, shareholders have banded together to support a petition demanding justice for MMTLP shareholders. Let’s get into the details.
Shareholders Band Together for MMTLP Stock Petition
At the time of writing, the petition had collected over 8,200 signatures. Furthermore, it claims that an “unknown entity” or short seller created a market for the Series A Preferred shares in Oct. 2021. These shares appeared in Meta Materials shareholder’s account with an initial value of 50 cents. Some brokerages only allowed a “Sell Only” option for the shares.
An update to the petition alleges short sellers manipulated the price of MMTLP lower using synthetic shares. The update claims short sellers used a stop loss raid strategy to drop the price of MMTLP from $9.90 to $2.90 between Dec. 7 and 8. The strategy supposedly netted the short sellers with hundreds of millions to billions of dollars.
Ultimately, the petition seeks to abolish dark pool trading and payment for order flow (PFOF). It also asks for the recovery of failure to deliver (FTD) shares within 30 days of failure and stringent punishments for “using naked shorting as a way to execute trades.”
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.