Nasdaq Gains Authority to Reject IPOs With Manipulation Risk After SEC Approval

Nasdaq obtained broader discretion to reject initial public offering applications deemed at manipulation risk, effective immediately on December 13, Reuters reports. The U.S. Securities and Exchange Commission approved the rule on Friday, permitting denials where a company's business locale will not cooperate with U.S. regulators, where underwriters, brokers, lawyers or auditors were involved in problematic transactions, or where the integrity of management or major shareholders is in doubt. The change is intended to address a wave of small IPOs that saw steep declines after listing; over the past year half of Nasdaq IPOs raised less than $15 million, and most of those shares fell by more than 35% within a year.