Nazz Delist Threats Hollow

Is the Nasdaq going easy on delinquent filers?

The exchange has a clear policy requiring companies to stay up to date when it comes to filing quarterly and annual earnings reports, with the threat of delisting as the ultimate enforcer.

But as the Nasdaq grapples with a wave of companies caught up in the stock-option backdating scandal, it appears that the Nasdaq is being lenient on violators.

Investors will get a better sense of just how lenient this month, as several late filers face critical deadlines.

The clock runs out for both Atmel (ATML) and Foundry Networks (FDRY) to file missing financial reports this week.

Marvell Technology Group (MRVL), which has not filed a complete financial report in the past four quarters, has until June 26.

Unlike previous phases in the delisting process, the latest deadlines appear to offer delinquent filers little hope of reprieve: A company either files its missing reports by the stated date or it loses its listing.

According to some attorneys involved in the delisting process, though, there is little certainty about how the Nasdaq will handle the situation for companies that aren't able to meet the deadlines.

"I think a lot of these will be handled on a case-by-case situation," says Jordan Eth, co-chair of the securities litigation, enforcement and white-collar defense group at the law firm Morrison Foerster.

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