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Libraries:   Listing Council Decisions
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  Listing Council Decision 2004-9
Identification Number 651
Rules 4300 and 4330(a)(3): NASDAQ may exercise its discretion in applying additional or more stringent criteria for initial or continued inclusion or suspend or terminate the inclusion of an otherwise qualified security if NASDAQ deems it necessary to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, or to protect investors and the public interest.
 
Issue: A director of the company, who was also the president of the company’s subsidiary, and a consultant to the company were indicted for conspiracy to commit commercial bribery and securities fraud. The currency used to commit the fraud was the company’s securities, which were issued pursuant to a consulting agreement approved by the company’s board of directors. Further, the current president and chief executive officer and the vice president and chief operating officer of the company were two of the board members that approved the issuance of securities.
 
Determination: The company was properly delisted in order to preserve and strengthen the quality and integrity of, and public confidence in, The NASDAQ Stock Market, and in order to protect prospective investors and the public interest. The nature of the allegations, which included conspiracy to commit commercial bribery and securities fraud, pose serious threats to the investing public, investor confidence in The NASDAQ Stock Market and the integrity of The NASDAQ Stock Market. Specifically, the Listing Council found that these facts, coupled with the board’s approval of the consulting agreement and subsequent issuance of securities without performing any due diligence, appears to indicate that the company lacks adequate internal controls. The Listing Council continued to be concerned that the company’s current president and chief executive officer and the vice president and chief operating officer continue to hold management and board positions within the company and yet were two of the board members who approved the consulting contract without discharging their due diligence obligation.
 
* * *
 
Rule 4350(g): Each issuer shall solicit proxies and provide statements for all meetings of shareholders and shall provide copies of such proxy solicitation to NASDAQ.
 
Rule 4350(e): Each issuer shall hold an annual meeting of shareholders and shall provide notice of such meeting to NASDAQ.
 
Issue: The company solicited proxies and held its fiscal year 2002 annual meeting in February 2004.
 
Determination: The company was properly delisted for failure to comply with the proxy solicitation and annual meeting
requirements. Although the company solicited proxies and held a meeting in February 2004, those actions did not cure the company’s obligation to solicit proxies or hold its fiscal year 2002 annual meeting in 2003.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 651
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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