Replies to post #218610 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[1jk1]

c,why did they in your opinion. glta

[El_Jefe42]

I'd hate to think how low the pps would have gone had they not included it in the 8-K and word get out about an investigation.

[Spinosaurus]

If you separate out the "OR OTHER PERSONS" from the rest, then if sould become clear. that is why the, IMO, the and/or phrasing is included. The securities laws violations does not have to be by the company. spino

[loanranger]

While the company would not ordinarily be required to file an 8-k notifying the public that a formal SEC investigation had begun, there is a wrinkle in this case that I think caused it to be required. Try this:

1. RME is a shareholder of SPNGE.
2. MM and SM are both officers of SPNG and controlling persons of RME.
3. The fact that RME was aware (obviously) of the investigation made that information subject to the selective disclosure rules.
4. So, by law, all shareholders had to be informed.

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;sid=eec133c15727f0680a98b3a13928dafb;rgn=div5;view=text;node=17%3A3.0.1.1.4;idno=17;cc=ecfr
The only thing is, I believe that the filing should have been made "simultaneously" versus "promptly" under the rules. So it was a little late. People selling after the letter and before the filing might be in trouble.

[Our-Street]

Your response from the SEC did not cover the relevant aspect of the law pertaining to SPNG's requirement to include the SEC investigation in the 8K.

This has to do with the intentional or unintentional disclosure of material non-public information, ie: the existence of this investigation. As soon as the company became aware of the investigation and the fact that more people than the insiders of the company had knowledge of this fact, they had an obligation to add this to the 8K. No way of knowing who they might have told but they certainly knew subpoenas were issued outside the corporation making that a disclosure of material non-public information. So... yes SPNG did have the responsibility to disclose this fact, especially when they were filing an 8K anyway.

http://wutc.wa.gov/rms2.nsf/177d98baa5918c7388256a550064a61e/efd239f65c0d840088256efb007c789a!OpenDocument