(Reuters) – Online used-car retailer Carvana Co’s license to sell vehicles in Illinois was suspended on May 10 over the mishandling of paperwork related to its vehicle sales, a state official said on Wednesday.

Shares of Carvana fell 9.2% to $37.8 in morning trade.

The license was suspended due to the misuse of issuing out-of-state temporary registration permits and for failing to transfer titles, Illinois Secretary of State spokesman Henry Haupt said.

Vehicles that have already been purchased but not yet delivered can still be delivered to the purchasers during the suspension, but no new vehicle sales can occur in Illinois during the suspension order, Haupt added.

“We are actively working with the state to resolve this issue,” Carvana said, adding that it “strongly disagrees” with the state’s characterization of both the facts and the law.

The license suspension comes three days after the company, known for its automated car vending machines, laid off about 2,500 employees, or 12% of its workforce.

Carvana has also missed profit estimates over the past three quarters as expenses soared and demand for used cars slipped due to soaring prices and inventory shortages.

(Reporting by Kannaki Deka in Bengaluru; Editing by Amy Caren Daniel)