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  Listing Council Decision 2008-1  
Identification Number 624
Rule 4310(c)(14):  The issuer shall file with NASDAQ three (3) copies of all reports and other documents filed or required to be filed with the Commission. This requirement is considered fulfilled for purposes of this paragraph if the issuer files the report or document with the Commission through the Electronic Data Gathering, Analysis, and Retrieval system. An issuer that is not required to file reports with the Commission shall file with NASDAQ three(3) copies of reports required to be filed with the appropriate regulatory authority. All required reports shall be filed with NASDAQ on or before the date they are required to be filed with the Commission or appropriate regulatory authority. Annual reports filed with NASDAQ shall contain audited financial statements.
 
Issue:  The company was not able to file its delinquent periodic SEC reports due to the need for additional time for the company to complete an on-going investigation into financial irregularities at a company subsidiary. Based on a Panel decision, the company was scheduled to be suspended, pending delisting, by the Panel, because the Panel was at the limit of its discretionary authority. The Listing Council exercised its discretionary authority to call the Panel’s decision for review and stay any future Panel determinations to suspend the company’s securities from trading, pending further action by the Listing Council.
 
Determination:  The decision of the Panel was appropriate at the time it was rendered. The Listing Council also uses its discretionary authority to grant the company an additional 60 day extension of time to demonstrate compliance with all Global Select Market continued listing requirements.
 
In reaching its determination, the Listing Council applied a facts and circumstances analysis, and found that based on its analysis, that this company should be given additional time to become compliant with NASDAQ’s filing requirement.
 
The Listing Council considered many factors, including, but not limited to, the following:
  • The company reacted quickly and took appropriate steps once the potential problem was identified, including initiating an independent investigation, hiring outside consultants to assist with the forensic analysis and to assist with bolstering the company’s internal controls, and terminating five employees who were determined to be the architects and implementers of the wrongdoing.
  • There is no suggestion of wrongdoing by the company or any of its senior management.
  • The company promptly notified the investing public of its inability to file its delinquent filings.
  • The company has cooperated with regulators and federal authorities.
  • The company has implemented the remedial measures recommended by its consultants.
The Listing Council also considered that the company was not in any other distress and that, but for the accounting issue, the company was ready to remedy its filing delinquency and, based upon historical financial information, appeared to have the financial strength to continue to meet the maintenance standards of the Global Select Market. The Listing Council understands that the accounting analysis has been slowed by the magnitude and complexity of the problem, and the company’s dependence on outside factors to complete the process. The Listing Council was also particularly cognizant, and considered, that the Panel had exhausted its ability to provide the company with an additional extension of time, and would have provided the company more time if available under the rules.
 
While the Listing Council takes seriously the requirement to file accurate and reliable financial statements and the concomitant purpose to provide investors with current information, the Listing Council balanced its analysis with the extraordinary circumstances in which many companies find themselves. In making its determination, the Listing Council undertakes a facts and circumstances analysis in each case to determine if additional remedies are appropriate.
 
Based upon the record, the Listing Council recognized that the company has been pro-active in trying to regain its status as a good corporate citizen, and believed that such diligence should be rewarded with an extension of time to demonstrate compliance.
 
As such, pursuant Listing Rule 4802(b), the Listing Council finds that it is appropriate in this instance to exercise its discretionary authority and provide the company with a short extension of time to demonstrate compliance with Listing Rule 4310(c)(14).
 
Based on the foregoing, the Listing Council affirms the decision of the Panel to suspend the company’s securities, and grants the company an exception of 60 days to file its delinquent periodic reports and restatements.
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 624
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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