Bank of America Bans Trades of All MicroCaps With Shares Under $5
According to CNBC, Bank of America’s Merrill Lynch brokerage recently told clients it was changing its trading policy regarding penny stocks.
CNBC’s sources say Merrill Lynch banned purchases of ‘penny stocks’ in late July, and added restrictions to sales in September. As of September 30th, stocks priced under $5 per share from companies with a market capitalization under $300 million will be subject to a regulatory review, according to a copy of rules obtained by CNBC.
The CNBC article state; “Bank of America appears to be the first major wirehouse to institute an outright ban on the purchase of penny stocks. While other firms have review processes for these riskier trades, it’s still possible to buy penny stocks at Morgan Stanley and UBS, according to people with knowledge of those firms’ policies.”
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