Pro: SK3 having embarked on this course, it will be interesting to see how it plays out down the road. I would have preferred they at least delay the merger given the current regulatory climate.
Forwarned is forearmed. For a fresh perspective, I have asked a knowledgeable but very busy executive to glance over the three recent SKTO filings (04/15/2014), the amended annual (12/31/2012), the 8-K ( abridged merger agr't), and headlines from Med Greens as of 03/11/ 2013. It's a lot to ask, but I gave it a shot. Options available to common shareholders via Title 8 of Delaware code are also on the agenda. Last month, he said generally that tax savings can be a reason for a merger, among other reasons. That was a fresh insight I had overlooked.
For a sense of the regulatory climate in microcap, SEC Chair Mary Jo White (sworn in April 2013) has made three important speeches as Chair in which she described SEC's increased vigilance:
10/2013: "We obtained disgorgement from nearly two dozen firms ranging from $4,000 to more than $2.5 million – showing that no amount is too small to escape our attention, and that going after smaller infractions will not distract us from larger ones.[9] Even the cases with modest disgorgement amounts still translated into some sizeable sanctions, as we obtained a minimum penalty of $65,000 for the smallest violations.
In the process, we sent a message that we will not tolerate any violations – big or small – that threaten the integrity of the capital raising process. And we think that the message is being heard.
Microcap
We also continue to make clear to the microcap community that, there too, we are watching and acting.
Abuses in this area frequently involve entities that use false or misleading marketing campaigns and manipulative trading strategies, largely at the expense of less sophisticated investors. Over time, these abuses have proliferated due to the increased use of the Internet and, in particular, social media to publicize fraudulent schemes and lure in unsuspecting investors.
To stay on top of this, the division recently created a Microcap Fraud Task Force to ensure that the appropriate expertise and attention be brought to bear on these types of frauds.[10]
This task force targets broker-dealers, transfer agents, attorneys, accountants and other market participants who unfortunately often have key roles in facilitating these schemes. The Task Force’s aim is to develop real-time enforcement so that we can stop schemes in their early stages, with tools like trading suspensions and asset freezes. These cases also often involve cooperation with criminal authorities."
-Mary Jo White, 10/2013
http://www.sec.gov/News/Speech/Detail/Speech/1370540822127
09/2013: "Cover the Whole Market
Another principle of a strong SEC enforcement program is aggressive monitoring and covering the whole market – and the “whole market” for the SEC is broad and diverse. We, of course, have limited resources and need more to do a more effective job policing our markets and protecting investors. But we need to have a presence everywhere and be perceived to be everywhere bringing enforcement actions against violators in every market participant category and in every market strata
To just name a few areas:
We need to continue to direct our attention to protecting investors from misconduct by investment advisers at hedge funds, private equity funds, and mutual funds.
We need to continue to focus on financial statement and accounting fraud.
We need to continue bringing insider trading cases, where over the last four years we have filed an unprecedented number of actions.
And we need to remain focused on fraud in connection with microcap securities where abuses have unfortunately increased with the use of social media."
-Mary Jo White, 09/2013
http://www.sec.gov/News/Speech/Detail/Speech/1370539841202
02/2014 "In addition to the new admissions protocol and the Financial Fraud Task Force, the Enforcement Division also has other exciting new initiatives including a new Microcap Task Force [19 http://www.sec.gov/spotlight/microcap-fraud.shtml ] and a renewed focus on those who serve as gatekeepers in our financial system, just to name a few."
-Mary Jo White, 04/2014
http://www.sec.gov/News/Speech/Detail/Speech/1370540822127
Forwarned is forearmed. For a fresh perspective, I have asked a knowledgeable but very busy executive to glance over the three recent SKTO filings (04/15/2014), the amended annual (12/31/2012), the 8-K ( abridged merger agr't), and headlines from Med Greens as of 03/11/ 2013. It's a lot to ask, but I gave it a shot. Options available to common shareholders via Title 8 of Delaware code are also on the agenda. Last month, he said generally that tax savings can be a reason for a merger, among other reasons. That was a fresh insight I had overlooked.
For a sense of the regulatory climate in microcap, SEC Chair Mary Jo White (sworn in April 2013) has made three important speeches as Chair in which she described SEC's increased vigilance:
10/2013: "We obtained disgorgement from nearly two dozen firms ranging from $4,000 to more than $2.5 million – showing that no amount is too small to escape our attention, and that going after smaller infractions will not distract us from larger ones.[9] Even the cases with modest disgorgement amounts still translated into some sizeable sanctions, as we obtained a minimum penalty of $65,000 for the smallest violations.
In the process, we sent a message that we will not tolerate any violations – big or small – that threaten the integrity of the capital raising process. And we think that the message is being heard.
Microcap
We also continue to make clear to the microcap community that, there too, we are watching and acting.
Abuses in this area frequently involve entities that use false or misleading marketing campaigns and manipulative trading strategies, largely at the expense of less sophisticated investors. Over time, these abuses have proliferated due to the increased use of the Internet and, in particular, social media to publicize fraudulent schemes and lure in unsuspecting investors.
To stay on top of this, the division recently created a Microcap Fraud Task Force to ensure that the appropriate expertise and attention be brought to bear on these types of frauds.[10]
This task force targets broker-dealers, transfer agents, attorneys, accountants and other market participants who unfortunately often have key roles in facilitating these schemes. The Task Force’s aim is to develop real-time enforcement so that we can stop schemes in their early stages, with tools like trading suspensions and asset freezes. These cases also often involve cooperation with criminal authorities."
-Mary Jo White, 10/2013
http://www.sec.gov/News/Speech/Detail/Speech/1370540822127
09/2013: "Cover the Whole Market
Another principle of a strong SEC enforcement program is aggressive monitoring and covering the whole market – and the “whole market” for the SEC is broad and diverse. We, of course, have limited resources and need more to do a more effective job policing our markets and protecting investors. But we need to have a presence everywhere and be perceived to be everywhere bringing enforcement actions against violators in every market participant category and in every market strata
To just name a few areas:
We need to continue to direct our attention to protecting investors from misconduct by investment advisers at hedge funds, private equity funds, and mutual funds.
We need to continue to focus on financial statement and accounting fraud.
We need to continue bringing insider trading cases, where over the last four years we have filed an unprecedented number of actions.
And we need to remain focused on fraud in connection with microcap securities where abuses have unfortunately increased with the use of social media."
-Mary Jo White, 09/2013
http://www.sec.gov/News/Speech/Detail/Speech/1370539841202
02/2014 "In addition to the new admissions protocol and the Financial Fraud Task Force, the Enforcement Division also has other exciting new initiatives including a new Microcap Task Force [19 http://www.sec.gov/spotlight/microcap-fraud.shtml ] and a renewed focus on those who serve as gatekeepers in our financial system, just to name a few."
-Mary Jo White, 04/2014
http://www.sec.gov/News/Speech/Detail/Speech/1370540822127
