The SEC told bankrupt Hertz it has issues with its plan to sell stock, Chairman Jay Clayton says

The Securities and Exchange Commission told Hertz, which filed for bankruptcy during the coronavirus pandemic, that the regulator has issues with the rental car company’s plan to sell stock.

“In this particular situation we have let the company know that we have comments on their disclosure,” SEC Chairman Jay Clayton said Wednesday on CNBC’s “Squawk on the Street.” “In most cases when you let a company know that the SEC has comments on their disclosure they do not go forward until those comments are resolved.”

In an effort to get a piece of the market’s rebound from the coronavirus downturn, retail investors are piling into bankrupt companies like car rental company Hertz. With economic conditions improving suddenly, investors are betting these bankrupt companies are now in better shape than when they limped into Chapter 11.