Recent SEC suspension notices have contained some interesting new language that may possibly signal a significant shift in enforcement.
So far in December, the SEC has suspended 3 companies. 2 of them have been SEC registrants, and both suspension notices have contained a new statement. The first company (Caleminder) was 1 10-Q delinquent, and the second, Global Future City Holding, which was suspended today, was 2 10-Q's delinquent. Right after noting which filings were delinquent, the notices stated:
"and it has expressed no intention of complying with its reporting obligation going forward."
I wondered how the SEC determined this to be true. I originally assumed it was because the companies had not filed late filing notices since Caleminder did not for their June 30 2017 10-Q. However, Global Future, which is 2 10-Q's behind, did file Form NTs for both delinquent filings.
Did the SEC contact each company and ask if they planned to file going forward, or did they just assume that since they are delinquent with their filing obligations that is it? Either way, it could signal a significant change in the SEC's enforcement of delinquent filers that now companies delinquent just 1 and 2 quarters are being suspended instead of the 2 or 3 YEARS (or longer) the SEC allowed companies to trade before any notice was taken under prior SEC Chairpersons.
I also note that the SEC does not seem to have automatically moved to begin revocation procedures against either one of the suspended companies yet. This is very different than the policy for seriously delinquent filers that are suspended and revocation procedures are automatically initiated. Perhaps the SEC is moving to suspend delinquent filers much quicker, but may give them a chance to return to compliance before revocation.
