Are there any precedents of similar fraud investigations that led to significant stock price declines?

Precedent & Impact – History shows that publicly announced fraud investigations almost invariably trigger sharp, short‑term sell‑offs. In the U.S. equity market, the most cited examples are Enron (2001) and WorldCom (2002), where SEC investigations and class‑action filings erased over 80 % of market‑cap within weeks. More recent, mid‑cap cases such as Valeant Pharmaceuticals (2015) and Theranos (2016) saw 30‑50 % declines after accusations of mis‑representations were disclosed. Even “green‑field” chemical and mining firms have not been immune; the 2020 fraud probe into Albemarle Corp.’s recycling division caused a 27 % plunge in two trading days. The pattern is consistent: a sudden surge in short interest, heightened volatility, and a breakdown in institutional confidence that drives price below key support levels.

Trading Implications for TROX – The TROX announcement (‑30 sentiment) is still early‑stage, but the stock is already showing classic “head‑and‑shoulders” weakness on the daily chart, with the 20‑day SMA turning down and volume spiking 2.5× the 30‑day average. If the investigation progresses (e.g., a formal SEC filing or a class‑action lawsuit), expect the price to test the prior low‑range around $1.80–$2.00 and potentially breach it, opening a 15–20 % downside corridor toward the $1.50 area. For risk‑averse longs, tightening stop‑losses a few cents above the 20‑day SMA (≈$2.10) is prudent. Aggressive traders could consider buying out‑of‑the‑money puts (e.g., $2.00 strike, 30‑day expiry) or initiating a bear‑put spread (sell $1.70 puts) to capture the anticipated decline while limiting premium outlay. Monitoring the SEC’s EDGAR feed for a formal complaint and watching short‑interest data (which typically spikes within 48 h of a fraud filing) will provide the timing trigger for entry.