American Stellar Energy, Inc., Exchange Act Rel. 64897, July 18, 2011
The Commission upheld a summary revocation of the company's registration that was revoked by an ALJ after the company failed to file periodic reports. American Stellar's last filing was in 2008 for its 2007 fiscal year.
The ALJ did not hold a hearing and ruled on the pleadings. The Commission in its opinion argued that revocation was appropriate to prevent delinquent filers from making half hearted serial efforts to become compliant. It reasoned that this was contrary to the public interest in company's being current in their filings so that investors can have adequate information.
Yet by not summarily affirming its ALJs in situations like this the Commission actually encourages appeals which due to its insistence on issuing opinions puts the public at risk while it dawdles. The Commission always has the option of remanding cases such as this to the ALJ if it believes that a hearing should have been held. Under Commission rules an appeal nullifies the ALJ's decision. But in the routine delinquent filing case where the ALJ has acted summarily, it should and simply affirm the revocation. Appeals in such routine cases harm the public by encouraging appeals that postpone the inevitable revocation.