GREAT find!! Thanks for the post.
On the one hand, it's about time the SEC kicked WCVC's butt, so *maybe* they'll not only respond to the SEC as they are being FORCED to, but they'll file what they've been holding back (for some reason).
On the other hand, maybe it's time for shareholders to liquidate because I DO now think WCVC's being demoted to the Grey Market is a possibility. [I was looking for a rule change; it hadn't occurred to me that the SEC itself would yank their chain, and yank it hard.]
Why this could go to the Grey Market:
Section III
In view of the allegations made by the Division of Enforcement, the Commission deems it necessary and appropriate for the protection of investors that public administrative proceedings be instituted to determine:
...
B. Whether it is necessary and appropriate for the protection of investors to suspend for a period not exceeding twelve months, or revoke the registration of each class of securities registered pursuant to Section 12 of the Exchange Act of the Respondent, and any successor under Exchange Act Rules 12b-2 or 12g-3, and any new corporate names of the Respondent.
This 12-month suspension of registration sounds like 'go to the Grey Market' to me. [Note: it's not 'eternal hell', but a 1-year 'purgatory' for it's failure-to-file sins.]
The wording "for the protection of investors" means new investors can't get sucked in; but current investors are screwed (for at least a year).
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I also note that the date/time for the hearing isn't a long way off. At first, this might seem like the wait could be far off:
"IT IS ORDERED that a public hearing before the Commission for the purpose of taking evidence on the questions set forth in Section III hereof shall be convened at a time and place to be fixed by further order of the Commission, pursuant to Rule 110 of the Commission’s Rules of Practice, 17 C.F.R. § 201.110."
BUT, the SEC is DEMANDING an answer within 10 days from Jan 27, 2022:
"IT IS FURTHER ORDERED that Respondent shall file an Answer to the allegations contained in this Order within ten (10) days after service of this Order, as provided by Rule 220(b) of the Commission’s Rules of Practice, 17 C.F.R. § 201.220(b)."
and THEN, the commission will schedule a hearing within 2 weeks of receiving that answer:
"IT IS FURTHER ORDERED that the Division of Enforcement and Respondent shall conduct a prehearing conference pursuant to Rule 221 of the Commission’s Rules of Practice, 17 C.F.R. § 201.221, within fourteen (14) days of service of the Answer. The parties may meet in person or participate by telephone or other remote means; following the conference, they shall file a statement with the Office of the Secretary advising the Commission of any agreements reached at said conference. If a prehearing conference was not held, a statement shall be filed with the Office of the Secretary advising the Commission of that fact and of the efforts made to meet and confer."
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Of course, likely none of this will force WCVC to close any of its corporate restaurants, but surely it will kill any and all investor interest in obtaining a franchise.
HEY NIXON: BETTER POST A LAWYER-WANTED AD REAL QUICK!!!
