SEC to air companies' bedbugs06.18.18
On June 12, 2018, the SEC’s Division of Corporation Finance issued an announcement that it has decided to make public all “bedbug” letters issued after June 15, 2018. A “bedbug” letter is the correspondence that the Division of Corporation Finance sends to an issuer whose registration statement or offering document is so deficient that the SEC declines to review it until it is amended to resolve all deficiencies. Normally, the SEC only publicly posts correspondence via EDGAR after 20 or more business days have elapsed and the applicable filing review has been completed. According to the SEC’s announcement, however, bedbug letters will be disseminated via EDGAR within 10 calendar days of issuance and will appear in company’s filing histories on EDGAR with the tag SEC STAFF LETTER: SERIOUS DEFICIENCIES.
In other words, the SEC’s new policy is one more reason for companies making filings via EDGAR to ensure that they have engaged competent, experienced legal counsel before hitting “send.”