Hundreds of small public companies are leaving the stock markets, which can leave shareholders in the dark about the firms' financial health...

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WASHINGTON — Hundreds of small public companies are leaving the stock markets, which can leave shareholders in the dark about the firms’ financial health.

The trend has picked up since Congress toughened rules in 2002, amid corporate accounting scandals.

Predictions that the Sarbanes-Oxley Act would spur firms to go private haven’t come to pass. Instead, a growing number have deregistered, also known as “going dark.”

“Dark” firms remain public but delist from an exchange or market and no longer file quarterly and annual reports with the Securities and Exchange Commission.

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Shareholder approval isn’t needed to go dark, and deregistering is faster, easier and cheaper than going private, which involves buying out investors.

The process is open to companies with fewer than 300 to 500 shareholders of record; the number of actual shareholders can be much larger.

Shareholders can take a hit in the deregistering process. University of Maryland associate professor Alexander Triantis said stocks fall 10 percent on average when companies announce they are going dark.

Shares may trade on the loosely regulated “pink sheets” afterward, but activity is less frequent and more volatile.