On October 29, 2012, the SEC announced that it had initiated proceedings to determine whether to issue a stop order to prevent sales of shares in a development stage company that filed a registration statement on Form S-1, which became effective on August 29, 2012. An associated prospectus was filed on September 5, 2012, in which the company stated that it qualifies as an “emerging growth company” as defined in the Jumpstart our Business Startups Act, and reported total assets of $20.
The Division of Enforcement is seeking the stop order to prevent potential sales of stock under a materially misleading and deficient offering document. A stop order, if issued, would prevent the company or its shareholders from selling privately held shares to the public under its registration statement. The Division of Enforcement alleges that the registration statement is materially misleading because a disbarred attorney subject to an injunction, is a de facto executive officer and control person of the company, and the registration statement does not include information about him and his business experience.