SEC Suspends Companies for Statements and Promotions on COVID-19-Related Capabilities

The SEC temporarily suspended trading in the securities of two companies (see here and here) due to concerns about the accuracy and adequacy of public information about the companies' COVID-19 products and capabilities.

The SEC ordered a temporary suspension of trading in the securities of No Borders, Inc., due to "questions and concerns regarding the adequacy and accuracy of publicly available information." According to the Order, this included company statements about (i) the company's COVID-19 specimen collection kits, (ii) an agreement to bring COVID-19 test kits to the United States, and (iii) the company's activities related to the distribution of personal protective equipment. The SEC found that these business activities were referenced in social media posts, press releases, the company's website, and submissions made to the OTC Market Group, Inc.

Separately, the SEC ordered a temporary suspension of trading in securities of Sandy Steele Unlimited, Inc. "because of questions regarding the accuracy and adequacy of information in the marketplace." According to the SEC Order, the questions relate to e-mail stock promotions sent to investors from unknown sources claiming that the company is an "operational garment manufacturer" with capability of producing protective masks to protect against COVID-19. The SEC reported that the company's publicly reported financial statements indicate that it has "very limited" operations, sales, or inventory available for sale. The SEC also noted the company's substantial and concentrated selling of company stock through offshore accounts.

The SEC concluded that the "public interest and the protection of investors" required a suspension of the companies' securities, and ordered temporary trading suspensions beginning April 6, 2020 and ending April 20, 2020, respectively.