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Replies to post #81352 on RedHawk Holdings Corp (fka SNDD)
04/18/24 10:20 AM
Section 12(j) authorizes us as we deem “necessary or appropriate for the protection of investors” to suspend for 12 months or less or revoke the registration of an issuer’s securities if the issuer has failed to make required filings.
We apply a multifactor test to determine an appropriate sanction:
[W]e will consider, among other things, the seriousness of the issuer’s violations,
the isolated or recurrent nature of the violations, the degree of culpability involved,
the extent of the issuer’s efforts to remedy its past violations and ensure future
compliance, and the credibility of its assurances, if any, against further violations.1
Although these factors are nonexclusive, and no single factor is dispositive,17 “[w]e have
held that a respondent’s repeated failure to file its periodic reports on time is ‘so serious’ a
violation of the Exchange Act that only a ‘strongly compelling showing’ regarding the other
Gateway factors would justify a sanction less than revocation.
Respondent’s violations were recurrent in that it has failed to file required annual and quarterly reports over multiple years.
These violations are serious because “reporting requirements are ‘the primary tool[s] which Congress has fashioned for the protection of investors from negligent, careless, and deliberate misrepresentations in the sale of stock and securities.’”
An issuer’s failure to file periodic reports violates “a central provision of the Exchange Act . . . , depriv[ing] both existing and prospective holders of its registered stock of the ability to make informed investment decisions based on current and reliable information.
That Respondent repeatedly ignored its reporting obligations evinces “a ‘high degree of culpability.’ And because Respondent failed to answer the OIP or respond to the show cause order, it has submitted no evidence of any efforts to remedy its past violations and ensure future compliance. Nor has it made any assurances against further violations. Accordingly, each of the factors we analyze favors revocation. Respondent has failed to make a strongly compelling showing to justify another sanction. We find it necessary and appropriate for the protection of investors to revoke the registration of all classes of Respondent’s registered securities.
AI
