Time between appeal and decision - 7 months, 6 days.
Time between last brief and decision - 4 months, 30 days.
Pages - 10
Comment
This is a routine matter revoking the registration of a company that had repeatedly failed to comply with the periodic reporting requirements since 2001. The Company had not filed any annual or quarterly reports since June 2001. The Commission affirmed the ALJ's initial decision revoking the registration of the company.
Remarkably, the Commission denied the Division of Enforcement motion for summary affirmance without explanation, merely citing Richard Kern, Exchange Act Release 51115 (February 1, 2005)(observing that "summary affirmance is rare, given that generally we have an interest in articulating our views on important matters of public interest.").
The Commission failed to articulate what in this opinion involved any "views on important matters of public interest" that justified denial of the motion. This was not the first case of its kind and would seem particularly appropriate for summary disposition.
Key Points
- No scienter is required to establish a violation of the reporting provisions of Exchange Act Section 13(a).
- In determining sanctions against an issuer the Commission considers: the seriousness of the violations, whether the violations are isolated or recurring; the degree of culpability; the issuers efforts to cure the violations; and the credibility of any assurances, if any, concerning future compliance.
- Compliance with reporting requirements is mandatory and may not be subject to conditions from the registrant.
- Harm to existing investors from a revocation must be weighed against harm to potential future investors and both existing and potential investors are harmed by continuing lack of current and reliable financial information about the company.
Summary
There isn't much to say here. The company had not made any periodic filings since June 2001. The Commission suspended trading in the stock for 10 days in June 2006.
Revocation was appropriate because the company's violations were "numerous and extended over a lengthy period."
Particularly important is the fact that although current management took control of the company before June 2004, the company is 29 months delinquent in filing a Form 10-KSB for that year. The company has also made no filings despite the June 2006 trading suspension and the later institution of this proceeding.
