Nasdaq Suspends Comparator Stock Trading as SEC Ban Was About to End
Trading in shares of Comparator Systems Corp., scheduled to resume today after being halted more than two weeks ago, was suspended again as investigators continue probing the controversial company’s finances.
The latest suspension, ordered Tuesday by Nasdaq stock market officials, takes effect this morning--just as one imposed two weeks ago by the Securities and Exchange Commission expires.
“The trading halt will remain in effect until Comparator fully satisfies Nasdaq’s request for information and fulfills to our satisfaction its public disclosure obligations,” said Marc Beauchamp, a Nasdaq spokesman.
He said there is no time limit on the ban and, thus, no definite date when the company’s stock can resume trading. Comparator has been under investigation by Nasdaq and the SEC since the company’s stock inexplicably skyrocketed earlier this month, setting three daily trading records on the Nasdaq market.
Executives at the Newport Beach company said they have been cooperating with investigators. The latest trading halt, they said, was a disappointment but not a surprise.
“I can only hope that this will end with us being cleared, [proving] that we haven’t done anything wrong and that we certainly didn’t initiate this stock fiasco,” said Robert Rogers, chief executive of Comparator, which makes fingerprint identification systems.
A trading halt imposed by Nasdaq earlier this month led to Comparator’s admission that it may have overstated the value of 77% of its assets. Investigators are still scrutinizing the value of those assets, particularly several patents the company claims are worth more than $2.4 million, sources said.
The asset valuation is a key issue for Comparator because if the company’s balance sheet dips below $2 million, its stock could be bumped from Nasdaq into the so-called pink sheets--the low-profile realm of penny stocks.
“I believe that our balance sheet can and will support the listing requirements,” Rogers said.
The latest suspension means the value of Comparator stock remains frozen at 56 cents per share, the closing price on its last day of trading, May 8, before being halted by Nasdaq. Six days later, the SEC suspended trading for two weeks.
Comparator’s stock traded between 3 cents and 6 cents a share for most of the past five years, but shot up to as high as $1.87 per share in record trading earlier this month.
Executives said the spike might have been a result of the company’s planned release of a new high-tech fingerprint identification system at a trade show in Atlanta.
But sources say regulators have been looking for evidence of stock market manipulation, perhaps by brokers who buy and sell Comparator’s stock.
Comparator, which has never reported a profit in its 17 years as a public company, has issued millions of shares of stock to pay executives’ salaries and settle debts. The tiny company with 27 employees has about 610 million shares outstanding, more than heavyweights such as Microsoft Corp. or IBM Corp.
