The FLUBA Committee on Unintended Consequences of Legislation notes this demonstration of it being better to blow out the candle than curse the legislator:
Anacomp in San Diego has been publicly traded since the 1970s. But later this month, the data-services provider will "go dark."
In January, Anacomp deregistered its shares with the Securities and Exchange Commission.
The process of deregistering is called "going dark," because afterward the company no longer has to disclose much financial information.
Technically, the shares can still be bought and sold. They're listed on the "pink sheets," the National Quotation Bureau's list of daily quotes for companies not listed on any stock exchange.
Anacomp estimates the move will save the money-losing technology firm $3.2 million over the next two years, primarily in costs for complying with the Sarbanes-Oxley Act, which tightened accounting standards in response to the Enron and WorldCom scandals.
Since that regulatory law passed in 2002, hundreds of publicly traded companies, including several in Orange County, have taken this step, which is simpler and cheaper than buying out shareholders and going private. Hundreds more could soon follow, says attorney Thomas Magill, partner at Gibson, Dunn & Crutcher LLP in Irvine, who assisted Anacomp in going dark.
.... In Anacomp's case, most of its savings will be in audit costs it would have to pay to comply with SEC reporting requirements, especially for Sarbanes-Oxley, says Chief Financial Officer Linster Fox. Other savings are for consultants, executives' and directors' liability insurance, attorneys and two employees whose sole jobs were SEC compliance.
Tuesday, April 19, 2005
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