Again, quite sure you know more about this particular case than I. Only know securities law, but found this BK case intriguing. From reading details, SPNG mgmt lied on many fronts; sales, A/S, O/S, etc., but everyone seems to be in agreement that A/S is 3B.
A classic example of a fraudulent company being caught with their hand in the cookie jar by short sellers, who used this knowledge to their advantage, thinking that, after shorting at a premium PPS, and with a little nudge/whisper to media and SEC, the potential of revocation and subsequent de-registration of shares would make the short sells moot and all tax-free profit resulting from de-registration.
Seems fairly simple to understand and only remaining issue is if OBO = NOBO > A/S. If so, case will become even more interesting, as brokers on-the-hook to shareholders and to SEC for allowing REG SHO and FTD's to be abused. Ultimate result could be crooks squealing on crooks across the board, especially if short position could be financially ruinous to a brokerage firm.
Thank you for your input and will continue to follow the case.
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