sehr interessanter beitrag eines users über ein telefonat mit einem securities-anwalt.
http://finance.yahoo.com/mbview/threadview/...&tls=la%2Cd%2C4%2C3
http://finance.yahoo.com/mbview/threadview/...&tls=la%2Cd%2C2%2C3
dieses gespräch verdeutlicht sehr gut, warum es so wichtig ist für chin. rto's (in der jetzigen situation) während eines rechtsstreits keinerlei infos nach aussen zu tragen, obwohl sie dabei gegen sec-regeln verstossen, sowie die pflichten gegenüber ihren aktionären verletzen, aber letztendlich im interesse ihrer aktionäre handeln.
es wird u.a. entscheidend sein, wie sich abat verhält, nachdem der rechsstreit beigelegt wurde.
"ABAT, formerly trading on NASDAQ, currently trades on the PInk Sheets during the phase of internal reorganization and litigation. Our manufacturing, operations, sales and marketing are ongoing. " (ABAT)
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hier nochmal gebündelt:
I called him and we talked at length, about 45 minutes. This is a summary of the conversation.
Jim:
If you were advising a Chinese RTO, do you think you would advise them to not file their periodic reports during the class action lawsuit..
Attorney:
Yes, absolutely and I would advise them not put out any press releases and stay as dark as possible.
Jim:
Why?
Attorney:
First and foremost, if they go dark, the attorney's for the plaintiffs cannot use anything in their periodic reports against them. Second, it forces them to have to spend a lot of money to prosecute the case. They would have to go to China and review 1,000's of documents that are in Chinese and would all have to be translated. The cost would be phenomenal. they would not want to do that.
Let me add to that. Our job as attorneys is to protect the company, not the shareholders. Our job is to protect the company and it would be very expensive for us to go to China for due diligence. Just one week would add up to over $50,000 not counting the work we are doing here in the U.S.
See, the key is to avoid discovery. Both for the benefit of the settlement and for the cost involved for the company.
Jim:
But isn't the company obligated to file with the SEC?
Attorney:
Yes, those are the rules.
Jim:
But isn't it the law?
Attorney:
Yes, but it is not like a criminal law where if you break into someone's house you immediately get arrested.
Jim:
Please clarify that.
Attorney:
When you break a typical law, you are immediately looked at by the authorities. In the case of the SEC, they are looking for fraud. Not filing your periodic reports, you are not following the rules, but you are not defined as a criminal.
Jim:
But don't they have a fiduciary responsibility to their shareholders to file their periodic reports?
Attorney:
Think about the question Jim? They have fiduciary responsibilities to their shareholders. Yes, by all means they do. But by going dark, by not filing or putting out press releases, they could risk the chance of causing the plaintiff's attorneys to decide to go through discovery. If that happens, you are talking about two bad things happening. One, the enormous cost for the company and the shareholders to go through discovery which could amount well over $10,000,000. Second, they face the risk that one little item found by the plaintiffs during the discovery process could lead to a victory for them, either of these things could lead to the company going out of business. Our job is to minimize their exposure and get them out of the lawsuit as quickly and painlessly as possible.
Jim:
But the SEC?
Attorney:
Yes, the SEC is an issue, but not as great as the issue of losing their business.
Jim:
Could they get their shares revoked?
Attorney:
It is possible, but that is better than losing the company. If you look at it from that perspective then you could probably understand it.
Jim
What are the odds of the SEC revoking shares?
Attorney:
That's a hard call and I have not looked into the specifics of what they are doing now.
Jim:
What happens if the shares are revoked?
Attorney:
The shares can still be traded just like when a company voluntarily deregisters with the SEC. The company is still there. The earnings are still there. The ownership structure is still there.
Jim:
So the best option is for them to go dark?
Attorney:
Yes.
Jim:
Wouldn't that cause a massive decrease in the share price?
Attorney:
Yes, most likely.
Jim:
How can that be good for shareholders?
Attorney:
It is not good for shareholders in the short term. In fact, it is obviously more to the advantage of the investors that hold the shares short.
Jim:
So, the people who benefit are the ones that caused the situation?
Attorney:
Yes, that is a fact, so long as they cover when the price is low.
Jim:
If you ask me, that sounds like (B)(S). The ones that caused the problem in the first place benefit even more by this strategy you have advanced.
Attorney:
It is what it is. You have to keep in mind the goal of the company is to save the company. A class action lawsuit can often put a company into bankruptcy. It is not supposed to, but it does and happens more than you think.
Jim, think of the logic. Is it not best for the company to minimize both cost and risk for the shareholders?
Jim:
Yes. But this all sounds like a crock of s....
Attorney:
Only in the short term. By going dark, they minimize the chance of the Plaintiffs going through discovery. That reduces costs by thousands if not millions of dollars. Second, by settling for a small amount of money, they have protected the assets of the company as apposed to risking losing the entire company.
Attorney:
Let me add to that. Let's say you bought shares in a company at say $6.00 in 2010, and you sold them in 2015 for $14.00 that is very nice return on your investment. If the company comes out clean and protects their assets and their business continues to grow, then when they come out of the dark period, when they file audited financials and asset verification, the stock will return to normal valuation. |
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