Replies to post #121566 on Plastic2Oil Inc (PTOI)

[BRIG_88]

Nope....not until notified by the SEC of a Wells Notice...any scrutiny beforehand is the SEC's business.....at any rate feel free to call the SEC and tell them your theory

[Zardiw]

Sorry Charlie.......there ARE no legal proceedings at this time......and probably won't be........z

[P51-D]

Sure looks like the Wells Notice is a dead issue.....for JBI, as well as most others.

[Johnik]

You need to brush up on your securities law. An SEC investigation, which involves stuff like subpoenae, is most definitely a "legal proceeding", and must be reported.

I believe you need to brush up on your securities law as well. The issue is not nearly as simple as you make of it. You seem to suggest (although you also seem more antagonistic than explanatory), that every time someone from the SEC staff makes a mere inquiry to a company, that it must be reported. The company did, however, report the matter once it was issued a Wells notice relating, as it appears, to its 2009 financials. Can you articulate why you deem such disclosure insufficient, and why you proclaim (if that is in fact what you are doing) that the company was required to disclose the existence of an SEC staff inquiry long before the Wells notice had issued?

For those who seek true "expertise" on the subject, I would recommend (mindful that I am limited to links) the following article, which is written in part by a former Branch Chief of the SEC's Financial Fraud Task Force, and who is now a senior attorney at one of the world's premier law firms--Cravath, Swaine & Moore. Here is a brief excerpt:

"One of the most common locations of disclosure of a government investigation is in the 'Legal Proceedings' section of the nonfinancial statement portion of a registration statement or an annual or other periodic report . . . . An investigation on its own is not a 'pending legal proceeding' until it reaches a stage when the agency or prosecutorial authority makes known that it is contemplating filing suit or bringing charges. For example, most would consider an SEC investigation to have evolved into a 'proceeding known to be contemplated by a government agency' when the SEC Enforcement staff issues a Wells notice. A Wells notice is issued by the Enforcement staff to persons involved in an investigation, stating that the staff is prepared to recommend that the Commission file an enforcement action, even though the Commission has not yet had an opportunity to consider the recommendation. On the other hand, in the experience of the authors, an investigation probably has not ripened into a 'contemplated proceeding' when the Enforcement staff and the issuer are engaged in pre-Wells discussions about what it might take to resolve an investigation."

http://www.cravath.com/files/Uploads/Documents/Publications/3233975_1.PDF

I should that there are other leading commentators (sorry no link, but I could cite a book) who opine that even the issuance of the Wells notice itself is not, standing alone, sufficient to trigger disclosure, unless the totality of the circumstances rise to the level of "materiality." It has been argued that since the Wells notice is simply a proposed course of action from the staff, rather than a prospective course of of action from the Commission, it does not amount to a "proceeding contemplated" by the SEC within the purview of the SEC Reg. governing disclosure of legal proceedings. Of course, this counterargument to the article cited above is irrelevant as it relates to JBI, since the company has disclosed its receipt of a Wells notice.

Would you care to elaborate on your self-professed superior understanding of the SEC regs?