UNITED STATES OF AMERICA
SECURITIES EXCHANGE ACT OF 1934
Admin. Proc. File No. 3-10171
ORDER DENYING STAY
On February 9, 2000 the National Association of Securities Dealers, Inc. ("NASD") deleted quotations on the OTC Bulletin Board ("OTCBB") of the securities of Millenia Hope, Inc. On March 28, 2000, Millenia filed with the Commission an Application for Review of the NASD's action and requested a stay of the NASD's action pending Commission review. Millenia filed a reply brief on April 19, 2000.
We approved a revision to the NASD's rules on January 4, 1998, that allows market makers to enter quotations on the OTCBB only for securities that meet the eligibility requirements specified in NASD Rules 6530 and 6540.1 NASD Rules 6350 and 6540 require that issuers file appropriate disclosure documents with the Commission and have those documents clear Commission comments. 2 Our Order approving the amendments required that the NASD phase in the Rules' application to those securities already quoted on the OTCBB.3 Under the phase-in program, the NASD informed issuers of currently quoted securities that the NASD would determine the eligibility of their securities for OTCBB quotation on a specific date (the "determination date") between six and eighteen months after the amendments took effect. 4 Millenia's determination date, by which Millenia 's Form 10-SB would be required to have cleared comments from the Commission, was February 9, 2000.
Millenia filed its Form 10-SB with the Commission on February 8, 2000, only one day before its determination date. Millenia's Form 10-SB did not clear Commission comments by February 9, 2000. Accordingly, the NASD deleted quotations for Millenia's securities from the OTCBB on that date. Since February 9, 2000, price quotations for Millenia's securities have not appeared on the OTCBB.
When considering requests for a stay, we apply a four-factor test. We evaluate whether (1) the moving party has demonstrated a strong likelihood of success on the merits; (2) the moving party will suffer irreparable harm in the absence of the requested stay; (3) others will be harmed by the issuance of the stay; and (4) the issuance of the stay serves the public interest. 5 The party requesting the stay has the burden of proof. 6
We conclude that three of these factors strongly weigh against granting Millenia's request for a stay. Millenia has failed to establish that it will suffer irreparable harm in the absence of the stay. Millenia has not demonstrated any harm to third parties. Although Millenia alleges that the NASD's actions make it difficult for the firm's existing shareholders, Millenia has not pointed to any specific harm that has occurred. Moreover, Millenia's investors can still trade Millenia's securities: the deletion means only that there will be no prices for those securities quoted on the OTCBB.
We also believe that the public interest weighs against a stay here. We do not find a public interest in resuming quotation of prices on the OTCBB for securities whose issuer has not yet complied with disclosure requirements. 7
We believe that Millenia's arguments on the merits are outweighed by its delay in pursuing this stay and the remaining factors discussed above. Millenia's nearly two-month delay before requesting the stay further suggests that a stay is not an appropriate remedy. Stays preserve the status quo pending review of the action stayed.8 In this case, entry of the requested stay would reverse the status quo, the continued absence of quotations for Millenia securities on the OTCBB, not preserve it. In light of these considerations, we determine that issuing the stay would not serve the public interest.
Accordingly, IT IS ORDERED that the request of Millenia Hope, Inc. for a stay, pending Commission review, of the action by the National Association of Securities Dealers, Inc. deleting Millenia Hope Inc.'s securities from the OTC Bulletin Board be, and it hereby is, denied.
For the Commission by the Office of the General Counsel, pursuant to delegated authority.
Jonathan G. Katz
-- NASD Rules 6530, 6540, NASD Manual at 6461-62 [CCH] (1999). -- Order Granting Approval of Proposed Rule Change Relating to Amendments to NASD Rules 6530 and 6540, 64 Fed. Reg. 1255 (1999). -- Id. at 1257. -- Id. -- See Cuomo v. Nuclear Regulatory Commission, 772 F.2d 972,974 (D.C. Cir. 1985); Al Rizek, Securities Exchange Act Release No. 41972 (October 1, 1999), 70 SEC Docket 2374, 2375; Sidney C. Eng, Order Denying Stay, Admin. Proc. File No. 3-9308 (Oct. 27, 1997). -- Sidney C. Eng, Order Denying Stay, Admin. Proc. File No. 3-9308 (Oct. 27, 1997) at 3. -- In its April 19, 2000 filing, Millenia represents that it is current in its filings with the Commission. The Commission's records reflect that the staff issued comments on Millenia's Form 10-SB on April 4, 2000. Millenia filed amendments to its 10-SB on April 20, 2000, but the filing has not cleared comments. Millenia also filed a quarterly report on Form 10-Q on April 18, 2000. --Id.; see also, Edward Veisman, Order Denying Stay, Admin. Proc. File No. 3-9328 (July 21, 1997) at 4.