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[QUOTE]Originally posted by BuyTex: [QB] from purlie re company fighting for SEC to enforce reporting requirements: [QUOTE]Blue, Dustoff, unrelated to this thread and a rather lengthy article. This is a good article for learning about little known SEC rules. This is fascinating. From PGLD stock, sorry about the length but certainly worth reading; good learning. ** Wynnefield Demands SEC Action against Phoenix Gold International April 24, 2006 07:00:08 (ET) NEW YORK, Apr 24, 2006 (BUSINESS WIRE) -- Wynnefield Capital, Inc. today announced that it has filed a formal complaint with the Enforcement Division of the Securities and Exchange Commission (SEC) and an application with the SEC under the Administrative Procedure Act demanding that the SEC commence enforcement action against Phoenix Gold International, Inc. (OTC: PGLD.PK). According to Wynnefield's complaint, for nearly two years Phoenix Gold has flagrantly disregarded its obligation to file public reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934. Wynnefield first advised the SEC of Phoenix Gold's reporting duties in September 2004. Since then, Wynnefield has repeatedly asked the SEC to intervene, but to date the SEC has taken no action to enforce its own reporting requirements. Nelson Obus, a general partner of Wynnefield, observed that SEC action is necessary to protect the interests of Wynnefield and other outside shareholders because shareholders cannot privately enforce the SEC's reporting requirements. Phoenix Gold made a Form 15 deregistration filing, an extremely detrimental action against outside shareholders (those who are not part of management or the Board of Directors), on February 6, 2004. As a result of the filing, the share price has fallen substantially and the stock has lost liquidity. When Phoenix Gold refused to reconsider the deregistration decision, Wynnefield transferred shares of stock directly to its partners and other interested third parties to ensure that the number of record holders was above the level necessary to require the Company to fulfill its reporting obligations. This distribution was necessary because the archaic Exchange Act definition of record holder does not count individual beneficial owners who hold stock in a brokerage account for purposes of determining an issuer's reporting obligations. The Company therefore became obligated to resume Exchange Act filings because it had more than 300 shareholders of record at the beginning of its next fiscal year. Companies that deregister ordinarily are no longer required to provide annual, quarterly or periodic reports to investors, known as 10Ks, 10Qs and 8Ks. However, section 15(d) of the Exchange Act requires any company that has made a registered securities offering (in the case of Phoenix Gold, an IPO) to resume reporting whenever it has 300 or more shareholders of record at the beginning of its fiscal year. Wynnefield's limited partners and other interested parties alone account for more than the minimum number required for filing. According to Wynnefield's complaint, in addition to previous shareholder lists, Phoenix Gold's most recent shareholder list, dated December 31, 2005, showed 473 shareholders of record, which would continue to subject it to SEC reporting requirements. Wynnefield General Partner Nelson Obus stated, "Phoenix Gold has repeatedly ignored the SEC's reporting requirements and violated its own promises to provide shareholders with the financial information they need to make informed investment decisions. Shareholders have received no financial or other information for 2005, seven months after the end of Phoenix Gold's fiscal year, and the deadline has passed for the annual shareholders' meeting for 2006. For the last two years, Wynnefield has expended considerable effort and resources communicating with Phoenix Gold and working through appropriate channels at the SEC's Division of Corporation Finance to get this company to comply with its legal obligations to shareholders. We have discussed this matter on numerous occasions with officials from the SEC's Division of Corporation Finance, but have received no indication that they are going to recommend action against this flagrant example of non-compliance or are even particularly sympathetic with the plight of this Company's outside shareholders. We have no choice but to take our cause directly to Enforcement and the Commission. The SEC is supposed to be the investors' advocate, and we believe that the SEC's investor protection efforts should start with enforcement of its own reporting rules. SEC action against this issuer is long overdue." Mr. Obus continued, "The SEC's reporting rules are the primary instrument of investor protection under our securities laws. Self-interested corporate managers will always look for some excuse to hide the ball from shareholders, but if the SEC's rules are enforced, investors should get the information they need to make informed investment decisions. "We call upon the SEC to enforce its own rules and insist that companies comply with the law. It is bad enough that the SEC continues to allow companies the unilateral ability to deregister when they may in reality have thousands of shareholders holding stock through brokerage firm accounts. In this case, however, we know as an absolute fact that Phoenix Gold has more than the required 300 shareholders of record, and the SEC still is not requiring it to satisfy the reporting rules. Unless the SEC enforces reporting obligations, investors may be at the mercy of self-interested managements," Mr. Obus concluded. Wynnefield has been a leader in the effort to change the deregistration rules to count the number of shareholders holding in "street names" or through brokerage firm accounts. This common sense rule change would align investors' true economic interests with an issuer's reporting obligations. A petition by institutional investors to change the rule was filed with the SEC in July 2003 (Rule-Making Petition No. 483) and is still under consideration by the SEC. About Wynnefield Capital Wynnefield Capital, Inc. is a value investor, specializing in U.S. small cap situations that have company- or industry-specific catalysts. Established in 1992, Wynnefield's founding partners, Nelson Obus and Joshua Landes, held senior research and institutional equity positions at Lazard Freres & Co. during the 1980s, and its initial investors included many of their colleagues at Lazard. Wynnefield has over $400 million under management. SOURCE: Wynnefield Capital, Inc.[/QUOTE] [/QB][/QUOTE]
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