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What Can I Do When a Stock Stops Trading?

Question: Nasdaq recently halted trading on a stock I own. What can I do to salvage my investment?

– Alexandra Plock, Middletown, R.I.

Answer: Extended trading halts on the Nasdaq and New York Stock Exchange don’t happen very often. These days, the majority concern some Chinese firms that sidestep the scrutiny of an initial public offering through a process called a “reverse merger.” Nasdaq says it will halt trading in rare cases where it finds that not enough information exists for investors to make informed decisions. The bad news for investors is that they’re basically in limbo until the outcome of the inquiry, when either trading will resume or the stock will be delisted. Filing a class-action suit might help you recoup losses, but even if you settle, says Adam Pritchard, a securities law professor at the University of Michigan, “it’s usually 10 or 15 cents on the dollar.”

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