SEC Pursues Violations Of Rule 12b-25: Has "Broken Windows" Returned?

The U.S. Securities and Exchange Commission ("SEC") has charged a group of small companies with making deficient filings on Form 12b-25, harkening back to the SEC's "broken windows" strategy from the last decade.

For the second time in just over two years, the U.S. Securities and Exchange Commission ("SEC") has charged a group of small companies with making deficient filings on Form 12b-25 (commonly referred to as a "Form NT"). On August 22, 2023, the SEC announced settled proceedings against five companies for allegedly violating Section 13(a) of the '34 Act and Rules 13a-11 and 12b-25 thereunder. Each company allegedly filed a Form NT containing boilerplate language about its inability to timely complete its quarterly or annual report, but the SEC alleged that each company knew when it filed the Form NT that the delay, in fact, stemmed from an anticipated restatement or correction of prior financial reporting. Some of the companies also allegedly omitted