UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Admin. Proc. File No. 3-10206
On May 18, 2000, High Speed Net Solutions, Inc. ("High Speed" or the "Company") filed an application for review of the decision of the National Association of Securities Dealers, Inc. ("NASD") to remove the quotation of High Speed's securities from the OTC Bulletin Board ("OTCBB"). The NASD had determined, pursuant to NASD Rules 6530 and 6540 (the "Eligibility Rules"), that High Speed's securities were no longer eligible for quotation on the OTCBB because the Company's Form 8-K had not cleared Commission comment prior to the applicable deadline. On the day that it filed its request, we granted High Speed an interim stay of the NASD's decision to provide an opportunity to determine whether a stay should be granted pending review.1
On September 18, 2000, the NASD informed High Speed that, pursuant to the NASD Rule 9700 Series, it would allow an NASD Hearing Panel to determine whether High Speed's securities should continue to be quoted on the OTCBB and requested that High Speed withdraw its application for review since there would no longer be an adverse NASD determination to contest. On September 26, 2000, the NASD requested that this proceeding be remanded to it for resolution. The NASD hearing currently is scheduled to take place on October 19, 2000.
The NASD contends that a remand is appropriate and cites our invitation in similar proceedings to request a remand should the NASD decide to apply existing procedures to resolve the disputedissues.2 High Speed objects to the remand of this proceeding and argues that the existing procedures that the NASD has chosen to apply, a hearing conducted pursuant to the Rule 9700 Series, will not provide it with an opportunity for meaningful or fair review. High Speed contends that it cannot prepare adequately for the Panel Hearing because the NASD has failed to articulate the criteria and standards it will apply. Moreover, High Speed contends that it is entitled to a grace period or extension of time in which to comply with the Eligibility Rules and notes that the NASD has expressed in similar proceedings the view that the Hearing Panel does not have the authority to grant such relief. Without a potential grace period, High Speed claims that it remains subject to an adverse NASD determination, and therefore, a remand is not appropriate. Should the Commission remand this proceeding nonetheless, High Speed argues that the remand order must delineate the authority of the Hearing Panel to provide a grace period as well as the standards the Hearing Panel must apply in granting relief.
We find it appropriate to grant the NASD's request to remand this proceeding. The NASD should have the opportunity to apply its established grievance procedures to make a determination regarding the eligibility of High Speed's securities for continued quotation on the OTCBB.3 At the conclusion of this proceeding, should High Speed remain dissatisfied with the NASD's determination, it may seek our review under the Exchange Act. We do not intend to suggest any view on the outcome.
Accordingly, IT IS ORDERED that this proceeding be, and it hereby is, remanded to the National Association of Securities Dealers, Inc.By the Commission.
Jonathan G. Katz
1 High Speed Net Solutions, Inc., Order Granting Interim Stay, File No. 3-10206.
2 See PalmWorks, Inc., Order Granting Stay and Ordering Briefs, Exchange Act Rel. No. 43294 (September 15, 2000). See also Intelispan, Inc., Order Granting Stay and Ordering Briefs, Exchange Act Rel. No. 42738 (May 1, 2000).
3 As High Speed has noted, in another proceeding, J.D. American Workwear, Inc., Administrative Proceeding File No. 3-10281, the company ("JDAW") moved to stay the delisting of its securities from the OTCBB by arguing, in part, that the NASD's review procedure was unfair because the hearing panel apparently had expressed the view that it had no authority to grant JDAW an exception to or exemption from the OTCBB eligibility requirements. See Order Denying Motion For Reconsideration and Request for Emergency Stay, J.D. American Workwear, Inc., Exchange Act Rel. No. 43295 (September 15, 2000). We denied JDAW's motion, finding that JDAW had not demonstrated a likelihood of success on the merits of its application for review. We determined there, as we do here, not to express a view on the merits of the NASD's position on the permissible scope of an NASD hearing panel's ability, under the Rule 9700 Series, to grant redress, where appropriate, to an aggrieved person.