Another year has gone by! Where does the time go? Just last year most of us were still scrambling and trying to decide if our businesses would survive the downturn. This year there seemed to be less scrambling and more definitive movement. Either companies were sold to others or started thriving again on their own. Our hearts go out to the victims of Hurricane Sandy and all those who still have little to eat or less than optimum shelter. But the last 10-11 years have demonstrated to us that we can weather anything and emerge better than before.
Hurricane Sandy hit New York hard. The Depository Trust and Clearing Corporation (DTCC) was also hit hard as it was located 2 blocks from Battery Park. Their subterranean vaults flooded and all those companies who have not been allowed to trade electronically and are still certificated had their certificates damaged to some extent. The transfer agent industry received an indemnity from the DTCC which allows us to accept for transfer copies of certificates that are still drying out or report damaged ones for replacement in a transfer. This “Act of God” occurrence has highlighted the need to allow more companies the ability to become electronic. Over the next year or two, we expect DTCC to lessen their stranglehold on the small and microcap companies wanting to become FAST/DWAC eligible.
On another note, in this environment of extra due diligence, it appears that the SEC is more and more interested in searching out possible wrongdoing. If they believe there is a possibility of wrongdoing, they may send you a subpoena for documents. An SEC Enforcement Action is not a criminal matter. It is civil. If they believe there has been criminal activity they will refer the matter to the U.S. Attorney’s Office and a separate action will be brought. SEC Enforcement matters usually begin with a Formal Order of Investigation that gives them subpoena powers. Should any company receive a subpoena, (which, typically, will be very vague, general, and possibly over-burdensome for you to produce the documents requested) please retain counsel immediately. You want your responses to be accurate, concise and formatted properly. If any of you need extra help in compiling what is requested, we can provide all of the transfer support documentation. Please let us help you.
Did you know that The Dodd-Frank Act requires smaller issuers (Public Float < $75M) who have a shareholder meeting on or after January 21, 2013 to address certain executive pay situations? You must allow shareholders to vote on a Say-On-Pay (SOP) proposal as well as a Say-When-on-Pay (SWOP) proposal to determine the frequency of the SOP vote. The proposals must be addressed in your proxy materials. All other issuers have already complied but the smaller issuers’ deadline is now closing in. Please ensure these proposals are on your ballot for your next annual meeting.
We have been reaching out to our companies (where many are located in a small area) and showing our appreciation of their business by offering a formal meet and greet along with dinner. We are having our third such dinner later this week. This allows us the chance to meet many of you and for you to meet us. We usually invite additional attorneys and auditors in the area along with a market maker or two in order to offer our companies the chance to network with other professionals. The response has been wonderful! It is so satisfying to be able to place a name with a face and hear all of your goals for your companies. Together we can truly build a prosperous team. We are looking forward to client appreciation dinners in Los Angeles and possibly one in Florida within the next year. If your company is in one of these areas we would be very pleased for you to join us.
This is typically the time of year to reach out to your community. With the economy still not ideal and the extreme weather patterns we are seeing many are in need of shelter, food and clothing. For Thanksgiving, First American Stock Transfer was able to buy approximately 70 large turkeys for a local food bank. The guys came back from their delivery of the turkeys with huge smiles on their faces. For the holiday season, we are tickled to have been paired with a family who is down on their luck – a mother and three young children. The staff has chipped in with charitable ideas to share and has already bought clothes and toys for all three children with something special for the mother. The entire staff takes on a glow when they get caught up in helping others. It’s a wonderful sight to behold.
So, we hope your holidays are prosperous, happy and healthy, your bellies full, your beds soft and cozy and you are surrounded by loved ones.