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The Division of Enforcement moved for reconsideration of a Commission ruling denying its motion to amend the order instituting proceedings to strike TAM Restaurants as a party. The proceedings were begun to determine whether to revoke or suspend the registrations of three corporations, including TAM, due to delinquent filings. The caption of the proceedings lists TAM (n/k/a Aerofoam Metals) as a respondent.
The Division moved to strike Aerofoam Metals, claiming that Aerofoam was not the successor of TAM. The Division's motion was based on information provided by Aerofoam that it had acquired a different corporation also named TAM. The Commission denied the motion because it found that the relationship between TAM and Aerofoam was unclear and needed to be further developed on the record.
The Division moved for reconsideration, claiming that the sua sponte order of the Commission to request further development of the record was unusual without briefing. The Commission noted that its rules do not allow its law judges to amend an order instituting proceedings unless the amendment involves new matters that are within the scope of the original order. The Commission explained that the Division's motion to drop a party was not within the scope of the original OIP and could not be decided by the law judge. Hence, it decided the original motion on its own.
The Division, in its motion to reconsider claims that Aerofoam is not in fact the successor of TAM and was not a separate respondent, but was only listed in the caption as a successor of TAM. Further, the Division argues that under Exchange Act Rule 12b-2 Aerofoam was not the successor of TAM.
The Commission noted that under its rules reconsideration is an extraordinary remedy designed to correct manifest errors of law or fact or to deal with new evidence. Such motions should not be used to reiterate arguments previously made or to cite legal authority that was previously available. The Commission held that the Division motion does not meet this stringent standard because it does not identify errors of fact or law, nor does it present new evidence.
This could be considered a spanking. Why the Division chose to spend its own and the Commission's time filing such a motion, instead of simply attending the hearing ordered by the previous Commission order into the relationship between TAM and Aerofoam is a mystery.
The original Commission order was filed on October 22, 2007. The Division's motion to reconsider was filed October 25, 2007. The Commission ruled in three weeks, proving that it can act promptly in these matters.