General Motors, which emerged from bankruptcy over a year ago in July 2009, recently announced that it is preparing a public offering of 365 million shares of common stock.

But investors holding "old GM" shares--shares issued before the company filed Chapter 11 in June 2009--are not entitled to receive the newly issued shares.

FINRA halted trading in old GM on July 10, 2009, and issued a new ticker symbol for the old GM stock--MTLQQ--to avoid confusion. The bankrupt company, now known as Motors Liquidation Company, and the new General Motors are separate and distinct.

Companies in bankruptcy are often the subject of rumors in fax or email newsletters, Internet message rooms or on websites offering online stock tips. Unfortunately, investors may receive potentially misleading information about the old GM or the IPO.

Investors should understand that buying common stock of companies in Chapter 11 bankruptcy is extremely risky and can lead to financial loss.

If you own shares in a company that has filed, or may be filing, for bankruptcy, or are considering purchasing shares of a bankrupt company, check the company's website for information about the bankruptcy. Also check the company's SEC filings, available through the SEC's EDGAR database or on the company's website, and other publicly available information for company statements about its
reorganization plan as well as a copy of the reorganization plan itself.

For more information:

• FINRA Investor Alert - Investing in a Bankrupt Company: A High Risk Venture

• FINRA - What to Do If a Broker Calls to Pitch an IPO

• SEC - Initial Public Offerings: Why Individuals Have Difficulty Getting Shares

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