From: Brad Christensen
Response Comment, Item 201(b), page 173
I am an investor in microcap stocks. There has been considerable and raising levels of discussion in our investment community about the large number of companies that go "dark" so as to avoid the SEC filing requirements. This raises concerns in that Rule 12g should be addressed. Shareholders of record is not a quality measure of the true levels of ownership of a company stock. Today the vast majority of shareholders hold their stock in "street name." The requisite 300 or more shareholders of record (to be a required SEC reporting company) is clearly no longer an appropriate metric.
Furthermore, when a company files a Form 15 it becomes unlisted. This is where bad things can happen to stockholders. Typically the stock price goes down as investors realize that the lack of transparency is a large uncertainty, to be at the discretion of the delisting company. Many companies will then refuse to provide shareholders financial statements or make the process arduous by requiring one-sided confidentiality agreements. Often times information is given out selectively which creates an uneven playing field. This could be solved by having companies that elect to go dark being required to provide financial information to any shareholder that requests this information and acting to assist these owners in seeing that this information is properly provided.
The time is now to address this topic.