For stock exchanges, the ongoing minimum standards are similar to the initial listing standards, but they're generally a little less stringent. In the case of the Nasdaq Global Market, one ongoing standard that a listed company must meet under the Market Value Standard is to maintain 1.1 million public shares outstanding worth at least $15 million—anything less could result in a delisting from the Nasdaq.5
In other words, if a company messes up, the exchange will kick the company out of its exclusive club. A stock that has experienced a steep price decline and is trading below $1 is very risky because a relatively small price movement could result in a huge percentage swing (just think—with a $1 stock, a difference of $0.10 means a change of 10%).
In low-volume penny stocks, the fraudsters flourish and stocks are much more easily manipulated. Major exchanges don't want to be associated with this type of behavior, so they delist the companies that are liable to be affected by such manipulation.