On April 29, 2021, with deadlines for first-quarter reports rapidly approaching, the SEC Enforcement Division sent an important message about using Form 12b-25 to request due date extensions.\u00a0 Form 12b-25 is short and simple.\u00a0 And while the extensions of 15 calendar days for an annual report and 5 calendar days for a quarterly report are not particularly long, they can be helpful to avoid becoming a non-timely filer and losing Form S-3 for twelve months. Yet, like all other SEC reports, if a 12b-25 is not complete there are consequences.<\/p>\n
The likely source of problems with 12b-25 lies in \u201cPart III \u2013 Narrative.\u201d \u00a0Part III provides this instruction:<\/p>\n
State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-CEN, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed time period.<\/p>\n
(Attach extra Sheets if Needed)<\/p>\n
As we discuss in our Workshops, it is important to make complete disclosures of all the reasons for any delay.\u00a0One example we cite is a February 2005 enforcement case \u2013 FFP Marketing Company, Inc., Warner Williams, and Craig Scott, CPA<\/a>.\u00a0 In February 2002, FFP Marketing Company discovered its financial statements were materially misstated.\u00a0 In a Form 12b-25 to extend the due date of its December 31, 2001 Form 10-K, the CFO\/CLO failed to disclose this fact.\u00a0 When the restatement came to light, the SEC enforced, sanctioned the company, and barred the CFO\/CLO from SEC practice for three years.<\/p>\n While the FFP Marketing case was many years ago, on April 29, 2021, just before the due dates for first-quarter reports, the SEC \u00a0announced Form 12b-25 enforcement cases against eight companies<\/a>.\u00a0 Using data analytics, the SEC found that these companies filed Form 12b-25s that failed to disclose that \u201canticipated restatements\u201d caused the delays.\u00a0 Each of the companies entered into cease and desist orders and paid fines ranging from $25,000 to $50,000.<\/p>\n The loss of Form S-3 for twelve months, while not stated in the enforcement release, is also another likely consequence in this type of case.<\/p>\n As always, your thoughts and comments are welcome!<\/p>\n","protected":false},"excerpt":{"rendered":" On April 29, 2021, with deadlines for first-quarter reports rapidly approaching, the SEC Enforcement Division sent an important message about using Form 12b-25 to request due date extensions.\u00a0 Form 12b-25 is short and simple.\u00a0 And while the extensions of 15 calendar days for an annual report and 5 calendar days for a quarterly report are … Continue reading A Timely Form 12b-25 Reminder from SEC Enforcement!<\/span>