Comparator Stock Plummets in Private Trades
Shares of Comparator Systems Corp. plunged 82% Wednesday, closing at 10 cents per share in a number of private trades that took place outside any recognized stock exchange.
The trades, which involved a tiny fraction of the Newport Beach company’s outstanding stock, marked the first time Comparator’s shares have changed hands since a May 8 trading halt was imposed by regulators of the Nasdaq stock market.
The trades appeared to involve privately negotiated transactions between investors and stockbrokers who are members of the National Assn. of Securities Dealers, which regulates the Nasdaq stock market, said Marc Beauchamp, a Nasdaq spokesman.
NASD brokers were allowed to make the trades because the trading halt was no longer in effect after Comparator was removed from the Nasdaq market Tuesday, Beauchamp said. Comparator was delisted by Nasdaq for failing to comply with regulators’ requests for more information about the company’s finances.
Beauchamp stressed that Comparator’s stock is not being listed on Nasdaq, or its small stock siblings, the OTC Bulletin Board and the pink sheets. Wednesday’s trades were reported, he said, because NASD brokers are required to notify the association whenever they make trades, even in stocks that are not listed.
About 2.3 million shares changed hands at prices ranging from as high as 12.5 cents per share to as low as .01 cents, he said. Comparator has 610 million shares of stock outstanding. There were about 143 trades, and some observers speculated that brokers were buying Comparator shares to cover short positions--bets they had made before the trading halt that the stock would fall in price.
Comparator has been at the center of a regulatory storm since early May, when its long-dormant stock set three Nasdaq trading records and soared from 6 cents to as high as $1.88. Since then, the maker of fingerprint scanning devices has been accused of fraud in a civil suit filed last month by the Securities and Exchange Commission.
Comparator’s attorney, Gerald E. Boltz, said the company has not applied to be listed on any stock exchange, and would not do so until the company completes a review of its finances.
Beauchamp said it is against NASD policy to name the parties involved in the trades.
Officials were not available for comment at Comparator.
