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  Listing Council Decision 2006-7
Identification Number 644
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 Securities and Exchange Commission (“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 unable to timely file its Form 10-Q for the quarter ended September 30, 2005, due to the resignation of their auditors. Additionally, the company’s new auditors questioned the company’s accounting for tax expense and deferred tax assets for 2003 and 2004. At the time of the Panel’s decision, the company had still not filed its Forms 10-Q for the quarters ended September 30, 2005 and March 31, 2006 or Form 10-K for the year ended December 31, 2005. The Panel delisted the company’s securities based on a filing delinquency.
Determination: The company was properly delisted because at the time of the Panel’s decision, the company was not current in all required public filings. As of the date of the Listing Council’s consideration of this matter, the company had still not filed its delinquent periodic reports. The Listing Council takes seriously the requirement to file accurate and reliable financial statements and the concomitant purpose to provide investors with current information regarding the company. Investors in securities listed on The NASDAQ Stock Market are entitled to assume that issuers of those securities will promptly and accurately comply with their reporting obligations under the Securities Exchange Act of 1934. In this case, investors did not have access to accurate financial information regarding the company, for over eleven months, from June 30, 2005 through the date of the Listing Council’s deliberations. The Listing Council notes that in the absence of accurate and reliable financial statements, Staff is unable to determine if the company was in
compliance with all of the Capital Market continued listing requirements. The Listing Council denies the company’s request for a 60-day exception to re-list its securities on the Capital Market upon becoming
current with its periodic reporting obligations. The Listing Council finds that it is not appropriate in this instance, given that the company was a recent repeat offender of the filing requirement, had not provided accurate financial information for over eleven months, and it was unclear to the Listing Council whether the company met either the initial or continued listing requirements for the Capital Market. The Listing Council also denies the company’s request that it be allowed to re-list under the continued listing requirements on the Capital Market upon becoming current with its periodic reporting obligations. The Listing Council notes that Listing Rule 4802(f)* provides, in part, that a security that has been delisted shall be required, prior to re-inclusion, to comply with the requirements for initial inclusion. As such, because the Panel appropriately delisted the company’s securities from the Capital Market, the initial listing requirements provide the correct standard for a review of the company’s listing qualifications. The Listing Council finds that the company will need to file a new listing application together with all applicable initial fees with Listing Qualifications, and the review of such application should be handled in the same manner as any new application to trade on The NASDAQ Stock Market.
*Rule 4802(f) replaced former Listing Rule 4430(e). See SR-NASD-2004-125, which became effective on August 26, 2005.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 644
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