See: Margin.
You can’t borrow against them. You can’t pledge them as collateral inside of a brokerage’s margin account system. So why would you not be able to margin against them? Like...what did they do that was so wrong?
In many cases, securities which trade only rarely, i.e. in extremely low volume, don’t qualify for the margin pledge dance. Why? Well, if the market was really hit by a bear, went down a lot, and there ended up being few buyers, and the brokerage had to liquidate your holdings, there might simply be no buyers at almost any price.
So liquidity matters. In many brokerages, the shares need to trade at least 2% of their total market cap each day to qualify for a given margin account setup.