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[QUOTE]Originally posted by bill1352: [QB] Revocation: At the Heart of the Plight Faced by Eagletech Communications Revocation is one of the most severe penalties that can be administered to a publicly traded corporation by the Securities and Exchange Commission. This action can be taken on a variety of fronts, stemming from a company’s fraudulent business practices, or on the basis of not being current on financial reporting requirements. The effects of a revocation would be immediately disastrous as any credibility of the organization would be destroyed in the light of regulatory action. Additionally, the impact on a small and developing company attempting to finance their business model through the public equity market, revocation could mean closing down operations. In the case of Eagletech Communications Inc. (PinkSheets: EATC), a provider of a local access virtual telephone system for small businesses, the Commission set up an administrative proceeding to determine “whether the registration of Eagletech's securities should be suspended or revoked.” This comes as a result of Eagletech’s inability to keep the investing public up to date with current financial information pertaining to the company. Justified in their actions, the SEC was taking the absolutely necessary steps because every investor should be provided with accurate and timely financial information to make informed investment decisions. According to the SEC, the “reporting requirements of the Exchange Act is the primary tool which Congress has fashioned for the protection of investors from negligent, careless, and deliberate misrepresentations in the sale of stock and securities.” In response to the potential revocation or suspension of its securities, Eagletech admitted that it had failed to file periodic reports with the SEC even as they offered an affirmative defense. In its defense, the company believes that “criminal conduct by third parties in connection with the trading of its securities caused its failure to file.” To support this argument, Eagletech presented evidence of the alleged criminal conduct. The company noted that in November 2001, Eagletech filed a lawsuit in the Broward County, Florida, Circuit Court against forty defendants, alleging common law fraud, conspiracy, illegal conversion of property and racketeering. In an exclusive interview with Ant & Sons, Rodney E. Young, chief executive officer of Eagletech Communications, believes that “the case would be ready for trial in one year.” Furthermore, in an Administrative Prehearing Conference, Young stated that “a jury award would generate enough money to bring Eagletech's periodic filings current and allow it to implement its business plan.” Young, an ardent protector of shareholder rights, told Ant & Sons that he believes potentially thousands of companies are facing extinction from the public equity markets due to this type of criminal conduct. He claims that numerous small publicly traded corporations, which are prime targets for abuse, are being “manipulated out of business.” However, Eagletech was dealt a blow on June 7, when Administrative Law Judge James T. Kelly, ordered that the “registration of all classes of the registered securities of Eagletech Communications, Inc., [be] revoked pursuant to Section 12(j) of the Securities Exchange Act of 1934. The initial decision concluded that “Eagletech's violations are egregious and ongoing,” due to the fact that Eagletech has “failed to file three audited annual reports and nine quarterly reports over a period of more than three years.” Yet, Rodney Young still has faith that the truth will be known, because he has taken into account the extraordinary amount of evidence Eagletech has compiled against the criminal conspirators in the U.S. District Court. This includes evidence from a ruling of the Supreme Court of the State of New York, wherein the DTCC was compelled to produce the company’s trading records. With an appeal soon to be filed by Eagletech, the company still has a glimmer of hope as there appears to have been a small loophole left in the initial decision. The judge stated that the policy argument of the short selling in Eagletech shares, as evidenced by the criminal short sellers, should be addressed and indicates that the Commission would again have to take a closer look at the dilemma. With this in mind, it may turn out to be a “long drawn out process,” says Young. Yet he feels confident about his company’s future and is hoping to create a “domino effect” that would lead to other companies standing up for their rights and asking for justice. [/QB][/QUOTE]
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