OTC Markets Halted Due to 'Connectivity Issue' ht
Post# of 144502
Posted On: 11/07/2013 1:24:37 PM
OTC Markets Halted Due to 'Connectivity Issue'
http://online.wsj.com/news/articles/SB1000142...1541669864
OTC Markets Halted Due to 'Connectivity Issue'
OTC Markets Noticed Tech Issues Ahead of Thursday's Open; Unknown When Will Reopen Trading
By JACOB BUNGE
Nov. 7, 2013 12:43 p.m. ET
Trading in thousands of stocks listed on OTC Markets Group Inc. froze Thursday after the platform suffered a "connectivity issue," according to a spokeswoman.
The outage prevented OTC Markets from opening up trading Thursday, leaving traders without the main market for trading securities not listed on major exchanges such as the New York Stock Exchange or the Nasdaq Stock Market.
The breakdown on the lightly regulated market for stocks of companies too small, sparsely traded or troubled to be listed on the major markets came on a major news day for two of the market's most closely watched stocks, the government-backed mortgage investors Freddie Mac and Fannie Mae.
OTC Markets' outage was unrelated to the reports and was "purely a connectivity issue," said a spokeswoman for the company. She said officials at the marketplace didn't know when it would be able to reopen.
The outage is the latest glitch to hit U.S. financial markets following a series of malfunctions at market operators such as Nasdaq OMX Group Inc. The developments have raised concerns among many market players about the stability of the technology backing trading in stocks, bonds and commodities, and the potential for a broader meltdown that could saddle investors with losses.
The New York-based market operator, which lets investors trade about 10,000 securities around the world, was previously known as the "Pink Sheets."
Staff first noticed the technology problems around 6 a.m. EST Thursday and opted not to open up trading when the U.S. stock market opened at 9:30 a.m. EST, the spokeswoman said.
Freddie Mac said it would make a $30.4 billion dividend payment to the U.S. Treasury by the end of this year, while Fannie Mae said it would pay $8.6 billion in dividends, leaving the companies very close to making taxpayers whole on their large investments in the companies since they were taken over by the government five years ago.
On Thursday, there was little share-price movement or volume in the shares—an unusual development given that millions of shares change hands in a typical day and many more on days with major news.
Fannie Mae and Freddie Mac have become enormously profitable, buoyed by a federal backstop, an improving housing market and little competition from private investors. Over the past year, hedge funds and other investors have bid up the shares, once considered worthless.
But those are effectively political and legal bets, not financial ones, because Fannie and Freddie's bailout agreement doesn't allow them to pay back the government, meaning they can't emerge from government control without action from Congress or the Treasury.
—Nick Timiraos contributed to this article.
http://online.wsj.com/news/articles/SB1000142...1541669864
OTC Markets Halted Due to 'Connectivity Issue'
OTC Markets Noticed Tech Issues Ahead of Thursday's Open; Unknown When Will Reopen Trading
By JACOB BUNGE
Nov. 7, 2013 12:43 p.m. ET
Trading in thousands of stocks listed on OTC Markets Group Inc. froze Thursday after the platform suffered a "connectivity issue," according to a spokeswoman.
The outage prevented OTC Markets from opening up trading Thursday, leaving traders without the main market for trading securities not listed on major exchanges such as the New York Stock Exchange or the Nasdaq Stock Market.
The breakdown on the lightly regulated market for stocks of companies too small, sparsely traded or troubled to be listed on the major markets came on a major news day for two of the market's most closely watched stocks, the government-backed mortgage investors Freddie Mac and Fannie Mae.
OTC Markets' outage was unrelated to the reports and was "purely a connectivity issue," said a spokeswoman for the company. She said officials at the marketplace didn't know when it would be able to reopen.
The outage is the latest glitch to hit U.S. financial markets following a series of malfunctions at market operators such as Nasdaq OMX Group Inc. The developments have raised concerns among many market players about the stability of the technology backing trading in stocks, bonds and commodities, and the potential for a broader meltdown that could saddle investors with losses.
The New York-based market operator, which lets investors trade about 10,000 securities around the world, was previously known as the "Pink Sheets."
Staff first noticed the technology problems around 6 a.m. EST Thursday and opted not to open up trading when the U.S. stock market opened at 9:30 a.m. EST, the spokeswoman said.
Freddie Mac said it would make a $30.4 billion dividend payment to the U.S. Treasury by the end of this year, while Fannie Mae said it would pay $8.6 billion in dividends, leaving the companies very close to making taxpayers whole on their large investments in the companies since they were taken over by the government five years ago.
On Thursday, there was little share-price movement or volume in the shares—an unusual development given that millions of shares change hands in a typical day and many more on days with major news.
Fannie Mae and Freddie Mac have become enormously profitable, buoyed by a federal backstop, an improving housing market and little competition from private investors. Over the past year, hedge funds and other investors have bid up the shares, once considered worthless.
But those are effectively political and legal bets, not financial ones, because Fannie and Freddie's bailout agreement doesn't allow them to pay back the government, meaning they can't emerge from government control without action from Congress or the Treasury.
—Nick Timiraos contributed to this article.
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