Series 79: Ineligible Issuers

Ineligible Issuers

In addition to the categories of issuers just described, the SEC designates certain issuers as “ineligible” issuers, which may not take advantage of less restrictive rules concerning communications during the registration period, such as using free-writing prospectuses or issuing forward-looking business statements. The issuers who fall into this ignominious class include issuers that have failed to file required reports during the preceding 12 months; shell or “blank check” companies (defined as development stage companies with no specific business plan) and issuers of penny stock;\ issuers that have declared bankruptcy; and issuers that have been convicted of felonies or certain misdemeanors, or that have been subject to administrative penalties or injunctions.

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