by Cydney Posner

Corp Fin has just announced that it will no longer require companies to include “Tandy” language in company responses to staff comment letters. “Tandy” language is a  written representation from the company acknowledging that the disclosure in the document was its responsibility and that it would not raise the SEC review process and acceleration of effectiveness as a defense in any legal proceeding. The staff’s requirement that each responding company provide “Tandy” representations had the effect of pressuring the company to waive some of its potential legal defenses.  The name “Tandy” originated with first letter of this type, which was issued in the mid-1970s to the Tandy Corporation. The staff began to regularly include Tandy request language in comment letters in 2004 when it began to make almost all filing review correspondence publicly available without first requiring submission of FOIA requests. 

The announcement advises that while “it remains true that companies are responsible for the accuracy and adequacy of the disclosure in their filings, the staff does not believe that it is necessary for them to make the affirmative representations in their filing review correspondence.  Going forward, we will no longer request those representations, but instead will include the following statement in our comment letters: ‘We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.’”

The change was effective upon publication of the announcement, so any companies that have received  but not yet responded to a Tandy request can now ignore the request.

Posted by Cydney Posner