pink sheets

More foreign companies gravitate to Pink Sheets

Jim Kim — Thu, 10 Jul 2008 14:45:03 -0400

One unexpected beneficiary of Sarbanes-Oxley has been the Pink Sheets, the listing service run by Pink OTC Markets. We're used to thinking of the service as a place for less-than-reputable micro companies that you'd want to avoid like offers to buy the Brooklyn Bridge. But in June 2007, the SEC allowed foreign companies to shift to a new U.S. trading venue if less than 5 percent of their global volume occurred in the U.S., according to Barron's. That ignited a flood of brand-name foreign companies to the Pink Sheets, boosting the service's prestige to all-time highs. A foreign company on the Pink Sheets maintains certain benefits, such a local currency for deals and a way to fund stock compensation plans for U.S. employees. At the same time, they escape the costs of Sarbox. Going Pink gives the best of both worlds.

For more:
- here's the Barron's article

SYMS saga takes new twist

Tue, 19 Feb 2008 06:59:59 -0500

Recall that retailer SYMS decided to deregister and trade on the Pink Sheets to save the money it would have spent on Sarbanes Oxley compliance. Well, some hedge funds didn't like it and put up a fight. They sued the company after its shares tanked and succeeded in forcing the company to re-register as a Nasdaq listee. So what's the lesson here? Can we say shareholders in general seem to like Sarbox? Maybe. Maybe not. But if you are going to cut your Sarbox costs you had better do it in a way that doesn't gut shareholder value. Short of a buyout, what is that way?

For more:
- here's the press release

ALSO NOTED: Committee pushes SEC hard on XRBL; CFOs stuck with compliance burdens;

Tue, 19 Feb 2008 06:59:58 -0500

> Paul Sarbanes does not regret the law. Article
> CFOs stuck with compliance burdens. Article
> More on corralling unethical behavior. Article
> Compliance efforts and keyloggers. Article
> The changing role of the CISO. Article
> More foreign companies now trade on Pink Sheets. Article
> Committee pushes SEC hard on XRBL. Article

And finally... How to avoid a boring job. Article

ALSO NOTED: In biotech, lots of pessimism about compliance; Sarbox can be an earnings driver;

Tue, 29 Jan 2008 06:59:58 -0500

> Rogue employee hit bank; are you protected from such employees? Article

> XBRL and higher audit fees. Article

> Michael Oxley joins APCO. Article

> Sarbox can be an earnings driver. Article

> Foreign companies still trade in U.S.-via Pink Sheets. Article

> In biotech, lots of pessimism about compliance. Survey

> These days, nonprofit directors are expected to give. Article

And finally ... The richest people you've never heard of. Article

Sarbox battle erupts over retailer

Tue, 15 Jan 2008 06:59:59 -0500

We've been debating the costs vs. benefits of Sarbox for a while now. Has the conventional wisdom shifted at all? Despite acknowledging the costs of Sarbox, deep down, people will always see a move to the Pink Sheets as a red flag. Consider retailer Syms. Its stock tanked in December when it announced it would delist from the NYSE. It said it could save $750,000 a year by avoiding Sarbanes Oxley. That's a big savings for a small firm. But shareholders took issue with the move. To them, the company has given up liquidity and gutted the stock, which outweighs the cost savings. The moral here is that a desire to avoid Sarbox, while understandable, will lead to questions. Perhaps more so now than just a few years ago. Unfortunately, going private may be more difficult these days.

For more:
- here's an article from NJ.com

ALSO NOTED: What's next for small companies; VC pros worry about law still;

Mon, 14 May 2007 20:01:38 -0400

> Some pols are still stumping for another small-company 404 extension. But that really does not seem likely. Release

> So what can small companies expect? Probably some form of relief, but we're just not sure how. Stay tuned. Article

> Deputy Chief Accountant of the Securities and Exchange Commission, James Kroeker, will address Sarbanes-Oxley's 404 requirements. Release

> Chinese listings to flood London and New York? Article

> Some venture capital pros still worry about the effect of Sarbanes-Oxley on their exit strategies. Article (sub. req.)

> The identity and access management (IAM) market, will grow to more than $5 billion in 2010 from $3.4 billion in 2006. Article

> Deutsche Bank now trades via Pink Sheets. We thought the service might get a boost from Sarbox. The quotation service seems to be really going after ADRs. Release

> The SEC still hasn't decided on whether top Wall Street banks should be liable for the Enron mess. Article

> Survey: Companies are expanding their use of data centers. Article

> Another CFO convicted of fraud. Article

> Should there be a Sarbox for political campaigns? Article

And finally... How to deal with an uncommunicative boss. Article

Pink sheets a better-looking alternative now?

Mon, 30 Apr 2007 20:01:39 -0400

The Pink Sheets still suffers a bit from its old reputation as a haven for shady firms. Trading in more than 30 companies suspected of criminal spam activity was suspended just recently. But as a quotation system, it has been working hard to improve its services, quality and image. In many respects, that work has paid off. And you have to wonder if Pink Sheets will benefit from Sarbanes-Oxley--it certainly senses opportunity. The Pink Sheets has recently launched a "premier" listing tier that aims to attract companies that want to avoid the burdens of SEC registration with Sarbanes-Oxley. The goal is to attract higher-quality companies that are distinct from distressed and shell companies that account for about 45 percent of the 8,000 listed companies. In other words, they want an AIM-like venue. Stay tuned.

For more:
- here's a Financial Times article

ALSO NOTED: Sarbox could have spared Nacchio;"Rogue" Web services could cause problems with IT controls;

Mon, 16 Apr 2007 20:01:29 -0400

> Addeco becomes latest company to delist from NYSE in accord with new rules. The company had repeatedly postponed its earnings due to a string of mishaps. Article

> We've noted that accounting is hot again. Salaries are good. Jobs are plentiful. This is most evident at universities. Article

> Laura Phillips, deputy chief auditor at the PCAOB, will step down. She wants to return to the private sector. If so, she is doing a good thing by stepping down first, and then looking. Article

> "Rogue" Web services could cause problems with IT controls. Article

> Sarbox could make it more difficult to implement "follow-the-sun" strategies for more efficiently using computing resources. Article

> Interestingly, Sarbox could have perhaps spared Joe Nacchio a celebrated on-going trial. Article

> Software flow diagram and drawing package company strikes Sarbox note in its marketing. Article

> I've often wondered if the Pink Sheets will get boost by Sarbox. Article

And Finally... A funny "guide" to spreadsheets. Article

ALSO NOTED: SEC and PCAOB are considering forming a new accounting panel; Pink sheets may get a boost;

Mon, 29 Jan 2007 19:01:38 -0500

> Here's a column from a former analyst who blames Sarbox for making his job tougher. But I think he's really talking about Reg FD. Article

> John Thain takes aim at low standards on AIM. Article

> Will the congressional plan on exec pay backfire? Article

> Basel Committee launches two new initiatives. Article

> The PCAOB has a new general counsel: J. Gordon Seymour. He starts next month. Article

> As more companies go private, the pink sheets may get a boost. Here's an example.

> The SEC and PCAOB are considering forming a panel that would tackle the issue of accounting complexity and how to mitigate it. Article

> Devesys announces upgrade to compliance case tracking software. Article

> New software for governance section of websites. Article

> The biotechnology industry has been among the most active in calling for Sarbox reform. Column

And finally... How should you motivate your employees? Article

An new option: Voluntary delisting

Mon, 27 Nov 2006 19:01:39 -0500

This is what you might call the least attractive of the responses to Sarbox: Bennett Environmental, a Canadian company, will voluntarily delist from the American Stock Exchange. It has pitched the move as a cost-saving effort. It will no longer have to comply with Sarbox. And, because it will deregister its shares with the SEC, it will also slash its reporting requirements. Presumably, it's shares will continue to trade on the Toronto exchange. Will we see an increase in American companies doing this, to trade on the Pink Sheets or elsewhere? I do not see a groundswell. But for a hard-lock company with almost zero trading volume, why not? If it gets to that point, Sarbox-related costs are not likely to be the tipping point. But Sarbox is a great excuse for just about anything these days.

For more on this:
- here's the Bennett release