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Summary of Dealing Effectively with the SEC Staff

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Arthur Mboue
Arthur Mboue

Arthur Mboue's document summarizes the process of dealing effectively with the Securities and Exchange Commission (SEC) staff. It outlines the various SEC divisions and typical timelines, including an average of 29 days for the SEC to issue its first comment on filings and 41 days to complete the comment process. It also describes potential post-filing outcomes like investigations, trials, and agreements like Non-Prosecution Agreements and Deferred Prosecution Agreements to settle charges.

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1 | Researchconductedby ArthurMboue SUMMARY OF DEALINGS EFFECTIVELY WITH THE SEC STAFF DCF and IMstaff are in charge(someCAO staff) DCF staff arein charged Enforcementstaff arein charged Enforcementstaff and courtstaff are in charged Pre-filing(morethan 15 daysshouldbe allocated) After filingof 10-K, 10- Q or 8-K,... and its posting takesaverage 29 days forthe SEC to issue itsfirstcomment It will be uploadand corresp exchange betweenthe SECdisclosure operationalteam and the company disclosure team, average 41 days should be allocated from the 1st comment to the completion 20 days laterthese letterswill be posted Investigation and Pre-trial (itcan take as longas years) NPA (Non Prosecution Agreements) may or may not last Deferred Prosecution Agreements-DPA (The companyis chargedor sued) No ActionLetters- NAL,exemptive applications,written interpretative requests, Confidential Treatmentcan be requested for up to 10 years 4 types of reviews will be conducted at the discretion of the SECstaff: Preliminary Full review Financial statements Targeted/Monitor review Philosophyadoptedto SECcomment letters If disclosure unclear- SECwill advise the companyto provide more clarification If disclosure is inconsistent-SEC will advise the companyto provide additional or supporting data (allthe companyposted documents, calls, conferences, releases are reviewfor Fair Disclosure-FD andcan be used) If the disclosure is wrongand material, it depends onthe level of materiality, SECwill advise the companyto correct its future filing or for extreme case, it will advise the companyto restate its disclosure The companyhas 10 days to respondto the SECand can obtain3/5 days extension Once the company received the no further comment letter, it means that the disclosure is completed. Companies have optionto disagree with the staff or no complywill face the next steps A receipt of subpoena notice will come withthe name ofthe SECcontact enforcement staff. The companywill do its own investigation as work product. While both sidesare evaluating their chances of winning during trial. It will be an opportunity for NPA What extendNPA is Compliance, self monitoringand reporting agreements;it is whyregistrant must start fixing its systemearlier. If the companywins the NPA, the agreement letter is signed bythe US DoJ (US Attorney) or the Divisions of Enforcement. Once the company ischarged or sued, all agreements betweenboth partiesare signed by the sitting judge. Itcan be court appointed monitoringsystem imposed. If the companywinsthe DPA,the judge (court) may accept it andsignit. Filing of 10-K, 10-Q, 8-K,.. 1st comment letter sent by the SEC Completion of the SEC comment letter phase Non compliant case sent to the enforcement team Subpoena phase Trial PHASE

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Summary of Dealing Effectively with the SEC Staff

  • 1. 1 | Researchconductedby ArthurMboue SUMMARY OF DEALINGS EFFECTIVELY WITH THE SEC STAFF DCF and IMstaff are in charge(someCAO staff) DCF staff arein charged Enforcementstaff arein charged Enforcementstaff and courtstaff are in charged Pre-filing(morethan 15 daysshouldbe allocated) After filingof 10-K, 10- Q or 8-K,... and its posting takesaverage 29 days forthe SEC to issue itsfirstcomment It will be uploadand corresp exchange betweenthe SECdisclosure operationalteam and the company disclosure team, average 41 days should be allocated from the 1st comment to the completion 20 days laterthese letterswill be posted Investigation and Pre-trial (itcan take as longas years) NPA (Non Prosecution Agreements) may or may not last Deferred Prosecution Agreements-DPA (The companyis chargedor sued) No ActionLetters- NAL,exemptive applications,written interpretative requests, Confidential Treatmentcan be requested for up to 10 years 4 types of reviews will be conducted at the discretion of the SECstaff: Preliminary Full review Financial statements Targeted/Monitor review Philosophyadoptedto SECcomment letters If disclosure unclear- SECwill advise the companyto provide more clarification If disclosure is inconsistent-SEC will advise the companyto provide additional or supporting data (allthe companyposted documents, calls, conferences, releases are reviewfor Fair Disclosure-FD andcan be used) If the disclosure is wrongand material, it depends onthe level of materiality, SECwill advise the companyto correct its future filing or for extreme case, it will advise the companyto restate its disclosure The companyhas 10 days to respondto the SECand can obtain3/5 days extension Once the company received the no further comment letter, it means that the disclosure is completed. Companies have optionto disagree with the staff or no complywill face the next steps A receipt of subpoena notice will come withthe name ofthe SECcontact enforcement staff. The companywill do its own investigation as work product. While both sidesare evaluating their chances of winning during trial. It will be an opportunity for NPA What extendNPA is Compliance, self monitoringand reporting agreements;it is whyregistrant must start fixing its systemearlier. If the companywins the NPA, the agreement letter is signed bythe US DoJ (US Attorney) or the Divisions of Enforcement. Once the company ischarged or sued, all agreements betweenboth partiesare signed by the sitting judge. Itcan be court appointed monitoringsystem imposed. If the companywinsthe DPA,the judge (court) may accept it andsignit. Filing of 10-K, 10-Q, 8-K,.. 1st comment letter sent by the SEC Completion of the SEC comment letter phase Non compliant case sent to the enforcement team Subpoena phase Trial PHASE