Market Overview

Longfin Gets The T-12 Halt, SEC Obtains Emergency Freeze Of $27M In Stock Sales

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Longfin Gets The T-12 Halt, SEC Obtains Emergency Freeze Of $27M In Stock Sales
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The bizarre story of Longfin Corp (NASDAQ: LFIN) took another crazy turn Friday. Shares were halted on a Nasdaq T-12 code after soaring nearly 50 percent within minutes of the opening bell.

Background

Back in December, Longfin's stock soared from under $10 a share to north of $140 in reaction to its acquisition of Ziddu.com, a blockchain-empowered solutions provider.

The story took a turn in February as the company's stock was delisted from the Russell 2000 and Russell 3000 indices. The stock plummeted as much as 80 percent from its December peak.

Longfin CEO Venkat Meenavalli was a guest on CNBC's "Fast Money" Wednesday afternoon, notably blaming short sellers for "destroying" the stock.

The stock was up another 50 percent Friday morning before being halted at 10:01 a.m. ET on a T-12 code.

Related Link: Why Longfin Shouldn't Blame Short Sellers

From Bad To Worse?

Not long after the news of a T-12 halt, the SEC said it has obtained a court order giving them access to freeze more than $27 million in trading proceeds from allegedly illegal distributions and sales of restricted shares of Longfin stock involving its CEO and three other individuals.

The SEC alleges Amro Izzelden "Andy" Altahawi, Dorababu Penumarthi, and Suresh Tammineedi illegally sold large blocks of their restricted shares to the public immediately after Longfin stock soared in reaction to the acquisition of Ziddu.

"We acted quickly to prevent more than $27 million in alleged illicit trading profits from being transferred out of the country," said Robert Cohen, Chief of the SEC Enforcement Division's Cyber Unit. "Preventing defendants from transferring this money offshore will ensure that these funds remain available as the case continues."

What's Next

A T-12 halted stock could remain untradeable for up to 10 business days. The stock last traded at $28.19 a share.

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