Quanta Inc (fka QNTA)

[falon]

What we know:

There is a SEC formal investigation.

On August 5, 2021, the Company received notice the Securities and Exchange Commission had commenced on investigation related to the Company and affiliated persons and entities.

What we don't know:

The extent of the investigation.

Who are the affiliated persons and entities.

Background on SCE Investigations:

Origins of Enforcement Investigations
An SEC inspection can result in no findings of violations,
which is very rare; a deficiency letter, which sets forth the
SEC examiner’s findings of violations and demands the firm
take remedial measures; or a referral to the SEC Division of
Enforcement. Often, an enforcement referral comes after
the receipt of a deficiency letter. The SEC inspection staff
now works very closely with the enforcement staff, so it
should be assumed that the enforcement staff will be made
aware of all material violations found during inspections.

Origins of Enforcement Investigations
A second and increasingly common source of SEC investigations
is a report by a whistleblower. The Dodd-Frank Act greatly
expanded the SEC’s program to compensate whistleblowers who
report potential violations to the SEC. The SEC now receives
thousands of such whistleblower reports every year and has
awarded millions of dollars to whistleblowers who provide valuable
information to its enforcement program. However, only an
individual is eligible for a whistleblower award; a legal entity is not
eligible for compensation. A related initiative, the cooperation
initiative, has greatly expanded the credit the SEC gives to
individuals or legal entities that provide valuable information to
assist its enforcement program. In certain cases, “partially
culpable” whistleblowers have even received civil and sometimes
even criminal immunity from prosecution in exchange for their
assistance to the SEC.

Origins of Enforcement Investigations
A third common source of SEC investigations is press
reports. The SEC monitors the press for stories about
possible illegal conduct and refers interesting articles to its
enforcement attorneys for investigation. If a private fund
becomes aware of press reports suggesting illegal conduct,
the firm should assume that the SEC may follow up those
reports with an enforcement inquiry

Overview of SEC investigations
The SEC conducts two general types of investigations: informal
inquiries and formal investigations. The difference between these
two types of investigations depends upon whether the SEC staff
can compel witnesses to provide information by issuing
subpoenas for documents or testimony.

How long do SEC investigations usually take?
Typically, SEC investigations take two to four years to complete.

How many enforcement actions does the SEC take each year against securities law violators What are the typical infractions?

Each year the SEC brings between 400-500 civil enforcement actions against individuals and companies that break the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.


Division of Enforcement 2020 Annual Report
https://www.sec.gov/files/enforcement-annual-report-2020.pdf

SEC Announces Enforcement Results for FY 2021
https://www.sec.gov/news/press-release/2021-238

Thoughts:

Any SEC investigation is not a good thing for any company.

Hopefully QNTA hired a SEC attorney to handle this matter.

It is hard to find solace in a SEC investigation however we can rest assure that if it was an egregious violation QNTA wouldn't be trading as it has been almost 4 months since the investigation begun.