Corp Fin has announced that it intends to begin to publicly release on EDGAR “bedbug” letters—letters issued by Corp Fin to advise the issuer that its registration statement or other offering document is so deficient that Corp Fin won’t even bother to review it until the filing is amended to repair the deficiencies. (This type of “bedbug” letter is not to be confused with the “poison pen” type of “bedbug” letter that is frequently submitted to the SEC by participants in proxy contests for the purpose of identifying errors, misleading statements and violations made in filings by their opponents. Why they are both called “bedbug” letters is above my pay grade.)
The announcement indicates that Corp Fin intends to post these letters on EDGAR within 10 calendar days of issuance. The public release of these letters “will make it clear that the Division believes the filing under consideration is not minimally compliant with statutory or regulatory requirements.” Just to ensure there’s no mistaking it—and, some might say, to raise the humiliation quotient—these letters “will appear in companies’ filing histories as SEC STAFF LETTER: SERIOUS DEFICIENCIES.” Corp Fin will start the process by publishing letters issued on June 15, 2018 and thereafter.