I was excited to see this Bloomberg article about how a company accidentally ignored a comment letter from Corp Fin because the emails from the Staff went into a spam folder at the company. The reason for my excitement is this: when I started in Corp Fin in the late ’80s – back before widespread use of computers – we had to call counsel to dictate our comments over the phone!
This “pre-computer days” process had these steps from the perspective of a front-line Corp Fin examiner:
1. Since Edgar wasn’t mandatory yet, paper copies of SEC filings were delivered – and if selected for review, they would be placed in a wooden box out in the hallway that was assigned to you.
2. You would review the filing and write out your draft comments by hand.
3. Your reviewer would read your draft comments and literally cross out – or add – comments. No points off for bad handwriting! Tough love for the reviewer.
4. You would call the person whose name was on the transmittal letter. Since there no voicemail back then, you might need to try calling a bunch of times. Or you would reach a secretary and they would try to call you back a bunch of times (but you weren’t around since you were taking a nap down in the SEC’s library). Serious phone tag.
5. Dictating the comments over the phone could take as long as an hour – depending on how many comments there were (remember that you were reading the bad handwriting of the accountants on the Staff too – their comments were combined with the legal comments, just like today) and how clear your diction was (if not clear, you would need to repeat yourself multiple times).
6. Rinse, wash, repeat for each round of comments. The good ole days…but at least companies couldn’t lose their comments in a spam folder!
So the question remains, how does “disclosure controls” fit into all of this…
SEC’s Chief Accountant: Annual AICPA Speeches
As noted in these memos posted in our “Conference Notes” Practice Area, the SEC has posted its annual slew of speeches (see the December 4th stuff) – a total of 8 – made by members of its Chief Accountant’s office at the big AICPA Annual Conference. The PCAOB made speeches too. We’ve posted memos about the speeches in our “Conference Notes” Practice Area…
Poll: What’s a Better Excuse for Ignoring Corp Fin Comments?
Please participate in this anonymous poll about fabricated excuses for blowing off a Corp Fin comment letter:
– Broc Romanek