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Maybe these are more common than I realize – but the SEC announced a while back this settled C&D order against ECO2 Plastics, a Pink Sheet company for not disclosing effective disclosure controls as well as the lack of effective internal controls. The order states that the company failed to comply with Item 307 of Regulation S-K in its ’08 and ’07 annual reports and Item 308T of Regulation S-B in ’07.

I can’t recall seeing a case where lack of disclosure controls disclosure was the primary charge alleged; usually it is a tack-on to some other charges. The order doesn’t provide much in the way of details, so I can’t quite figure out how egregious were the circumstances that led to these charges. In September ’09, the company filed an amended Form 10-K for 2008 (after it had already filed a prior amended Form 10-K in August) to include the Item 9A disclosure control disclosures that it omitted from the company’s 2008 Form 10-K (and it omitted the Item 8A disclosures in its 2007 Form 10-KSB). This new 9A disclosure includes a paragraph describing how the company couldn’t perform an adequate assessment of internal controls in ’07.

Based on all this, I think the case is predicated on failing to provide the required disclosure control disclosures for two years and failing to have effective internal controls in one. So lesson learned…

Lawyers as Actors

In this podcast, Howard Kline discusses his new acting activities, including:

– What new hobby have you picked up over the last few years?
– What led you to try something new?
– Do you think being a lawyer helped you in your acting career?
– And vice versa, does acting help your lawyering?

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– Broc Romanek