The client, a 34 Act reporting company, fell behind on its reporting obligations. As a result of the company’s failure to comply with the required reporting obligations and to meet the reporting obligations’ deadlines, a §12(j) revocation was issued by the Securities and Exchange Commission (SEC). If the §12(j) revocation had not been challenged, the client was barred from publicly trading its securities and would cease to be a publicly-traded company.
Although most companies accept the 12(j) revocation, we decided to fight it. We engaged an audit firm to assist with the financial statement preparation and to bring the company current with its reporting obligations. To file the necessary quarterly and annual reports, we chose a disclosure structure that would separate activity before the date of the individual disclosure and activity that was after the date of the individual filing, but prior to the actual filing date of the disclosure. All activity after the disclosure date was treated as a subsequent event and filed in a subsequent event note. With each filing, we closed and cured the delinquency by moving items from the subsequent events filing into the main body of the disclosure on the litigation side.
We opposed enforcement of the revocation through motion practice and applying relevant case law. The publicly traded client ultimately maintained its registration with the SEC.