Since 2004, public companies have had to acknowledge in writing, in response to SEC comment letters, that the disclosure in their public filings was their responsibility and affirmatively state that they would not raise the SEC review process and, if applicable, the SEC’s acceleration of registration statement effectiveness as a defense in any legal proceeding. On October 5, the SEC announced that effective immediately it will no longer request these acknowledgments from issuers, including for comment responses in public filings already in process.
The SEC’s announcement makes clear that the absence of these acknowledgements does not mean that the SEC’s position in this regard has changed. Going forward, the following statement will be included in SEC comment letters:
“We remind you that the company and its management are responsible for the accuracy and
adequacy of their disclosures, notwithstanding any review, comments, action or absence of action
by the staff.”
The SEC’s announcement provides no explanation for the change. Our suspicion is that the SEC has for some time understood that the acknowledgments had become obsolete as the SEC has been uploading comment letters to the EDGAR site for 12 years and it is now well known that the clearance of SEC comments cannot be relied upon by issuers as a bona fide defense in securities fraud litigation.
PartnerArmed with more than three decades of capital market experience, Spencer represents smaller publicly traded companies, and often underwriters and investment funds, in public and private securities offerings. He focuses ...