South Florida Arbitration & Litigation Lawyer Blog
Boca Raton, Florida Unregistered Sales of Security Fraud and Misrepresentation Litigation and FINRA Arbitration Attorney:
SEC Issues Stop Order to Prevent Northern California Company From Issuing Stock Under Amended Registration Statement
The Securities and Exchange Commission recently issued a stop order to prevent a Northern California-based company from issuing stock after including false and misleading information in its amended registration statement for an initial public offering (IPO).
Stop orders prevent the sale of privately held shares to the public under a registration statement that is materially misleading or deficient. If a stop order is issued, no new shares can enter the market under that registration statement until the company has corrected the deficiencies or misleading information.
According to the SEC’s stop order against Comp Services Inc., its registration statement fails to disclose the identity of the control person and promoter behind the company, and falsely states that Comp Services earned revenue for providing computer services even though the company has never earned any revenue. The registration statement has been amended 10 times, most recently in December 2013.
Comp Services consented to the issuance of the stop order, which also triggers the bad actor disqualifications to prohibit Comp Services from engaging or participating in any unregistered offering conducted under Rule 506 of Regulation D for a five-year period.
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