Did I get screwed in the Sorrento Tech liquidation?

Last year I bought some shares of Sorrento Tech, formerly known as Roka Bioscience (NASDAQ:ROKA), on its last trading day, December 28, 2017. Today the first liquidation distribution finally showed up on my brokerage statement, but to my unpleasant surprise only shares that I bought earlier got the distribution. After checking with my broker they told me, and I will quote their response below, this was as it should be because the company set an ex-dividend date of December 28, 2017.

Per DTC comments:
The First Interim Liquidating Distribution in the aggregate amount of $3,199,137.92, payable to the holders of the Record Date being December 28, 2017 on November 9, 2018 (the “Payable Date “) be,and hereby is, declared payable on November 9, 2018; and it is further.

Given that I bought the shares on December 28, 2017 and it takes two days to settle trades I didn’t get anything. So the question? Is this possible? Did someone screw-up? The company had not set any ex-dividend date in the proxy statement related to the liquidation, although it did state that it would close its stock transfer books at the close of business on such date.

To me it seems that someone made a mistake, and I don’t think it’s me. If the stock isn’t trading ex-dividend when I’m buying it, I should in theory get the rights to any potential future payment. But the question is, who screwed up? The liquidating company? DTCC? My broker? And what can I do about it? Any readers with a good idea?


Author seems to be long a bunch of ROKA shares that might be worthless.

34 thoughts on “Did I get screwed in the Sorrento Tech liquidation?

    1. Alpha Vulture Post author

      When I bought the stock it wasn’t trading ex-dividend! And it hasn’t been listed on an exchange for more than a year either since it was delisted. If it only would have been that easy…

      1. Gull Island

        I was just going by what the broker said, that it was trading ex-div on Dec.28, the day you bought it.
        Given that DTC said the record date was Dec. 28 that would also mean it was too late to buy.

        1. Alpha Vulture Post author

          Okay, maybe I wasn’t sufficiently clear in my post. But that December 28, 2017 ex-date was as far as I can tell set almost a year after! It didn’t exist in 2017 and there was no way to know that this would become the ex date.

  1. Brandon

    it’s pretty hard to track down your div. I remember I bought T bancshares only to find out that I won’t get special dividend even though there is no ex-dividend date shown on FINRA’s bulletin. then complaint to FINRA and SEC went nowhere. And FINRA more or less wants my broker to deal with me, but I don’t really want to screw up the relationship with IB…

  2. Jacob

    From the standpoint of Delaware law, I believe your purchase on 12/28 was of a scrip “due bill” entitlement to the liquidating distribution from the record holder who sold it to you. The holder of record on 12/28 should receive the distribution and their broker should remit it to yours. In practice, post-delisting the processing may not be taking place automatically at DTC and there could be a delay on the part of the delivering broker.

    You should discuss this with your broker and possibly also the transfer agent what the status may be.

      1. Jacob

        I wish I had something I could point you to. Had this been an OTC security there would have been a Daily List posting with more details on the ex-date. As it was NASDAQ listed up until the end, I think NASDAQ rules might also be operative here – companies can’t have ex-dates in the past and the ex-date of a distribution this large isn’t supposed to be in advance of the payment date.

        I’m hopeful for you that it’s just delayed processing.

        1. Alpha Vulture Post author

          According to IB it wasn’t trading with “due bill”, but I’m trying to get this escalated to the DTC because I do think someone made a mistake there and didn’t think about those trades that happened on the 27th and 28th of December. Also got some messages from people who are in the same spot as me, and have been trying to contact the company/liquidator. So sort of hopeful that it’s a mistake that can be corrected right now, but we’ll see. Messy situation.

  3. mara serena

    I am familiar with your situation and was involved in something similar a while back (don’t remember the exact company). These OTC stocks are just not well regulated/managed and I was flabbergasted how they set the ex-date in the past! I simply gave up as the money involved was not large. The due-bills process works if it specifically says ex-date is AFTER payment date. Otherwise, the ex-date is automatically the day before the record date. I am not aware of any Delaware law but that would be very interesting to find out. If you have large money involved, I have worked with a vey good Delaware attorney in the past and I can refer you to her.

    1. Alpha Vulture Post author

      I missing out on about $12K (plus potential future liquidation payments). It’s for sure a meaningful amount of money to me, although I’m not sure it’s enough to warrant getting an attorney involved… what kind of costs would I be looking at do you think?

      1. mara serena

        Probably worth talking to her especially if she can make it class action. That’s the only way she will do it. PM me at my email address.

        1. Vincent

          Hi, AV and Mara,

          I’m currently involved in a similar situation. I contacted Interactive Brokers and they game me the 800 to DTC and doesn’t seem very helpful. Can you email me the attorney’s contact info?

          Thanks a lot,

  4. pogonific

    Sheesh. Nasty. Sorry to hear about this.

    My experience is only very obliquely relevant, but here it goes.

    Last year Corem Property which is listed in Stockholm did a share split. I had some shares before the split date and was curious how the price actually adjusts on the moment of transition. So I popped some shares for sale at the pre-split price soon after the market opened. As there were some bids left over at the old price (split was like 1-9 or something), some of the trade actually executed (but for a tiny amount – it was like EUR100 or something). But then about 2 mins later I got a trade bust notification from my broker voiding the trade. I guess the message is that in this instance some human being at IB (my broker) or the actual market monitored the situation and reached the conclusion the trade was erroneous as the underlying value had changed and cancelled it.

    I guess in your situation the proxy states that the stock transfer books get locked on the Effective Date and the proceeds only flow to the people on the books while the 8K says the Effective Date is the 29th so your shares shouldn’t receive the liquidation proceeds as your trade was too late to make it onto the books. I suspect if this were a liquid stock the broker or the market would have been paying more attention and would have prevented you from buying on the 28th at a price which had clearly changed as happened to the buyer on my side of the transaction but they did not. So my beef would probably be with them, but it seems to me between the 8K and the proxy you were in theory adequately informed (I’m sorry to say)?

  5. Dan

    I once bought into a Closed end fund liquidation under the same conditions. I purchased the day it stopped trading. I also, in a separate account, purchased several days earlier. The earlier purchased was paid out promptly and the later purchase was paid out about a month later.

    But remaining vigilant is probably the proper strategy.

  6. Dan

    I had a bit of a similar situation in ARTC(arthrocare), I bought the stock on the last day of trading with a settlement due. After a year and a half of wrangling, they finally paid out, but I didn’t get the payment. The brokers which I owned the stock in said I had to have settled shares on the last day even though the stock was trading like there was still the payment due. Longs lose, shorts win in my case and seemingly yours too. So if ever in doubt, buy the shares 2 days before you expect the last day of trading!!

  7. Alpha Vulture Post author

    Got the following message from my broker a few days ago, so I think it might get fixed 🙂

    The agent has been in communication with the Issuer in regards to the liquidation payment. The Depository is awaiting further instructions in regards to the event details.

    As such, if updates or revisions in the payments are provided, the adjustments will be made to client accounts.

      1. cory bataan

        can you please each out to me. I am in same situation w ROKA and don’t know who to contact, what transfer agent, etc. If you could help with names, n umbers or email addresses that would be great. Thanks. Cory

        1. Alpha Vulture Post author

          The situation was corrected a long time ago, are you sure you didn’t get a payment? Otherwise, you should harass your broker and notify them of the DTC notice they should have gotten on the first of March this year in which the original payment was rescinded and a new one was issues to beneficial owners as of October 24, 2018.


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