Nazz Delist Threats Hollow
A section of Nasdaq's Web site about listing qualifications says that the council generally does not exercise its discretion to stay a delisting. But it notes that such stays may be appropriate in stock option accounting cases, given the unexpected nature of the situation, the complexity of the resulting internal investigations and the "enormous" effect the issues could have on the companies and individuals involved.
While a stay can offer temporary protection from the pink sheets, a company must still file the financial reports within the extended time frame granted by the Nasdaq Council. As those extensions now begin to expire, the Nasdaq may have to take a tougher line with the late filers.
Securities-law experts say the delisting rules never contemplated such a situation as the current backdating phenomenon.
Delisting rules exist to protect investors from companies that have ceased providing the market with up-to-date information and whose stock prices therefore no longer match the company's fundamentals, explains Dale Oesterle, a securities-law professor at Ohio State University Law School."In the back of Nasdaq's mind must be the view that there's enough information for these prices to still be pretty accurate and that this is a technical disclosure violation and doesn't affect the fundamental aspects of the company," he says.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV