SEC proposes easier foreign delisting

The Securities and Exchange Commission unanimously voted to propose rules to make it easier for foreign companies to stop listing their securities for trading in the country in order to avoid the expense of complying with U.S. securities laws. The SEC hopes the new rules will actually encourage foreign companies to list in the United States, knowing it would be relatively easy to leave.

The rule would allow a company to leave if less than 5 percent of the trading volume of its stock takes place in American markets, but only if less than 10 percent of the shares are owned by American residents. If less than 5 percent of its stock is owned by American residents, a company can leave the American market no matter how large the trading volume.

For stock issuers, deregistration would be allowed if a company has met SEC filing requirements for two years, has not sold stock in the United States for 12 months and has been listed on its home country exchange for two years.

A group of European companies had originally requested that corporations be able to drop their securities registration if trading volume in the U.S. was low, though SEC officials noted that volume along wasn't a good indicator of U.S.-based ownership. Current rules make it very difficult for a company that registers in the U.S. to leave the market. A company could suspend its registration if it has fewer than 300 American owners, but it faces the risk that it will have to resume compliance if the number of American owners rises above 300.

The rule will soon be sent out for public comment.

Lay begins making case before trial

Speaking before a Houston business group and professing his innocence in mid-December, former Enron Corp. chief executive Kenneth Lay blamed the energy company's chief financial officer for its infamous 2001 collapse.

Lay pointed the finger at former chief financial officer Andrew Fastow, who pleaded guilty to several charges in January, including stealing $60 million from the company, and was sentenced to 10 years in prison. Fastow is expected to be the star witness against Lay in a trial slated to begin January 17.

Lay will face conspiracy, fraud and false-statements charges along with former Enron chief executive Jeffrey K. Skilling and accounting chief Richard A. Causey. Reports say that the trio are attempting to build a defense that the company was a fundamentally sound business brought down by liquidity problems after trading partners lost confidence following the 2001 terrorist attacks and the implosion of tech stocks.

Panel: Don't hold small cos. to SOX

An advisory panel to the Securities and Exchange Commission may officially ask the agency to exempt businesses with less than $125 million in revenues from the internal control provisions laid out in the Sarbanes-Oxley Act.

The recommendation will be soon be put to a vote before the entire Advisory Committee on Smaller Public Companies.

In the panel's recommendations, the advisory group said that companies with market capitalization of $125 million and revenues under $125 million should be exempt from the rules altogether. And the group said that companies with market capitalization of less than $750 million and revenues less than $250 million should not have to employ independent auditors to attest to the strength of their financial controls.

A majority of the five-member SEC would have to approve a relaxing of the control reviews for small companies.

The internal control provisions are scheduled to take effect for small companies in July 2006.


In our feature on Women in Technology (Dec. 19, 2005-Jan. 8, 2006), we said that Jill Ward leads the vertical solutions business at Intuit. In fact, that was a position she held in the past.

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