Ban on GM employee stock purchases is extended

General Motors Corp. workers will be unable to buy GM shares through two employee savings programs indefinitely because the plans' administrator believes additional investments are not appropriate based on the automaker's financial situation.

GM initially suspended employee purchases of the company's shares within the savings plans on Sept. 30, saying workers had bought all the available registered shares.

GM said in a regulatory filing Tuesday that it had planned to register additional shares with the Securities and Exchange Commission and expected to lift the blackout in the week of Nov. 9. But State Street Bank and Trust Co., which independently oversees GM's employee stock fund, said any more investments by plan participants are not appropriate "due to GM's recent earnings announcement and related information about GM's business."

Earlier this month, GM posted a third-quarter loss of $2.5 billion. The company has said its cash burn has accelerated so rapidly that it may not survive into next year without government help.

That has driven GM's share price as low as $1.70, their lowest price in more than 70 years. Shares of GM fell 23 cents, or 6.4 percent, to $3.36 in afternoon trading Tuesday.

GM notified its directors and executive officers in September that they cannot buy or dispose of any GM equity securities that were acquired in connection with their employment. The Sarbanes-Oxley Act generally prohibits directors and officers from trading in their company's stock when most participants in the company's stock plans are not able to purchase or sell stock.

GM's SEC filing Tuesday said that restriction will continue. Other participants in the plan, however, are still allowed to sell stock and may also exchange shares for other investment options or change their contribution election, GM said.