Loch Harris Walking Through the SEC Minefield
By Giando Argentina
Published by OTCNN.com
11/07/2000 09:50 AM EST
Investors of Loch Harris Inc. (OTCBB: LOCHE) were caught by surprise after the close of trading on Friday, November 3, 2000, when Loch Harris released a PR stating that the routine SEC investigation the announced in an October 19, 2000 PR was not so routine after all.
The PR issued November 3 states, “The investigation the SEC is conducting is not routine. The Company understands that the focus of the SEC investigation is to determine whether or not the Company and others may have violated the registration, antifraud and periodic reporting requirements of the federal securities laws.”
The share price acted accordingly, closing at 28 cents the previous Friday and opening yesterday morning at 8 cents, with a nice rebound to the 19 cent level, which some fearless traders exploited for some quick, although risky gains, and closing at 13 cents.
Earlier in September, Loch Harris managed to touch the one-dollar level on news of their mine detection product, the ELF. According to Loch Harris, “The Company continues to anticipate it will cooperate (with the SEC); however, it also plans to protect the confidentiality of what it considers to be its trade secrets and other proprietary information which could put it in conflict with the SEC.”
Along with the SEC investigation, Loch Harris must also deal with the matter of being delinquent in their periodic filings with the SEC, which appended the dreaded ‘E’ for non-compliance last month to their trading symbol. On this issue the company press release states, “If the Company does not remedy the delinquency prior to Nov. 17, 2000 its shares of common stock will no longer be eligible for trading on the NASDAQ-OTCBB and will be delisted at the close of trading on Nov. 17, 2000. The company does not currently anticipate that it will have the delinquency remedied by that date. In addition, the company has a Form 10-Q filing that will be due Nov. 15, 2000. It does not currently anticipate that it will meet that filing deadline either.”
Another problem lies in the fact that in order to protect trade secrets, Loch Harris states in their press release that, “also plans to protect the confidentiality of what it considers to be its trade secrets and other proprietary information which could put it in conflict with the SEC.” Conflict with the SEC is not usually in agreement with building shareholder value.
In any case, according to the company press release, they expect to not be eligible for quotation on the OTCBB on November 17, 2000 and shareholders should consider that fact in their decision making process. Until Loch Harris can solve their problems, shareholders or prospective shareholders should walk very cautiously in the minefield that has been laid out in front of them.
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