Investors petition for FINRA to restore trading in MMTLP shares after shutdown

It has been several days since the Financial Industry Regulatory Authority (FINRA) suspended trading in Meta Materials Preferred Shares (MMTLP). However, the move is still fresh in the memory of MMTLP shareholders. FINRA explained that it had imposed the U3 shutdown code, which carries the definition of an “extraordinary event has occurred or is in progress that has had a material effect on the market for OTC equity securities. willful or has caused or has the potential to cause major market disruption and/or significant uncertainty in the settlement and clearance process”.

Meta-materials (NASDAQ:MMAT) previously announced that MMTLP would cease trading tomorrow, December 13. Shareholders with shares settling on December 12 would receive one share of Next Bridge Hydrocarbons for each MMTLP share held. Next Bridge would operate as an independent public information company and its shares would not be tradable.

This hardly seems fair to shareholders, with many speculating that FINRA might have imposed the halt to protect short sellers. On social media, investors argued that 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 unite for MMTLP stock petition

As of this writing, the petition has garnered over 8,200 signatures. Further, it claims that an “unknown entity” or short seller created a market for the Series A Preferred Shares in October 2021. These shares appeared in the Meta Materials shareholder’s account with an initial value of 50 cents. Some brokerages only allowed a “Sell Only” option for stocks.

An update to the petition alleges that short sellers manipulated the price of MMTLP downward using synthetic stocks. The update claims that short sellers used a raid stop loss strategy to drive the price of MMTLP from $9.90 to $2.90 between December 7 and December 8. The strategy reportedly netted short sellers hundreds of millions to billions of dollars.

Ultimately, the petition aims to abolish dark pool trading and payment for order flow (PFOF). It also calls for the recovery of Fail to Deliver (FTD) actions within 30 days of failure and stiff penalties for “using a bare short as a means of executing trades.”

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At the date of publication, Eddie Pan held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.