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Nasdaq Defense Attorney

Our Lawyers Represent Companies That Are Facing Delisting from Nasdaq and Dealing with Related Enforcement Matters and Litigation

John W. Sellers
Attorney John W. Sellers
Nasdaq Team Lead
Former DOJ Trial Attorney
envelope iconContact John

For many companies, getting listed on the Nasdaq represents a significant step in their growth. Satisfying the Nasdaq listing standards isn’t easy, and companies must go through a rigorous multi-step application process to secure a coveted Nasdaq symbol. This makes protecting companies’ Nasdaq listings all the more important. Delisting from Nasdaq can have significant financial consequences; and, in many cases, it can carry legal implications as well.

While the Dow Jones does not have a set of quantitative listing standards, the Nasdaq is different. Companies listed on the Nasdaq stock exchange must meet several specific requirements—and they must continue to meet these requirements to maintain their listed status. The Nasdaq suspends and delists companies regularly; and, while it is possible for companies to get relisted in some cases, it is far better for companies to avoid suspension and delisting whenever possible.

Experienced Nasdaq Defense Lawyers Representing Companies Nationwide

At Oberheiden P.C., we serve as defense counsel for companies facing suspension or delisting from Nasdaq. Our lawyers are intimately familiar with Nasdaq’s Rules and listing standards, and we are equally familiar with the financial and legal risks companies face when their Nasdaq listings are in jeopardy. We represent companies in other securities matters as well, including federal investigations, enforcement proceedings, and litigation related to Nasdaq’s decision to review companies’ eligibility.

When you choose Oberheiden P.C. for Nasdaq defense, your company will be represented by a highly experienced team of lawyers. This includes experience in the private sector as well as experience prosecuting companies for securities law violations at the U.S. Department of Justice (DOJ). As a result of our lawyers’ experience on both sides of federal securities enforcement matters, we are well-versed in the issues and defense strategies that come into play in Nasdaq suspension and delisting cases, and we are able to provide effective representation for companies facing suspension or delisting under all scenarios.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Has Your Company Received a Notification of Deficiency from Nasdaq?

Nasdaq starts the delisting process by delivering a notification of deficiency to the subject company. As explained in Nasdaq Rule 5810, this notification of deficiency may take one of four forms:

  • Staff Delisting Determination – When a company receives a Staff Delisting Determination, its listing is subject to “immediate suspension and delisting” unless the company timely files a successful appeal.
  • Notification of Deficiency with Option for Compliance Plan – If the issue triggering Nasdaq’s notice of deficiency does not warrant immediate suspension and delisting, exchange staff may request that the company subject a “plan of compliance” for review.
  • Notification of Deficiency with Ability to Cure – For non-systemic deficiencies, companies may be able to avoid suspension and delisting by effecting a cure within Nasdaq’s specified compliance period.
  • Public Reprimand Letter – If a company violates Nasdaq’s rules but the violation does not warrant delisting, the exchange may issue a Public Reprimand Letter that is subject to disclosure on Form 8-K. Typically, Nasdaq issues Public Reprimand Letters “to address inadvertent violations of Nasdaq’s corporate governance rules.”

Upon receiving a notification of deficiency from Nasdaq, it is imperative to carefully review the notification with the company’s outside counsel. The company must quickly discern its next steps as well as the timetable for executing a response. Appealing a Staff Delisting Determination, developing a compliance plan, curing Nasdaq Rule violations, and responding to a Public Reprimand Letter are all very different prospects, and they all require a strategic and custom-tailored approach focused on the particular facts and circumstances at hand.

Common Issues That Can Lead to Nasdaq Suspension or Delisting

Determining what a company needs to do to preserve its Nasdaq listing starts with understanding why the company’s ticker symbol is at risk. This should generally be clear from Nasdaq’s notification of deficiency, though interpreting Nasdaq’s language and relating the exchange’s allegations to the facts at hand can prove challenging in some cases. Under Nasdaq Rule 5810, potential grounds for suspension or delisting include (but are not limited to):

  • A discretionary determination that the company’s continued listing “raises a public interest concern”
  • Failure to file periodic reports in compliance with Nasdaq Rule 5250
  • Failure to make the disclosures required under Nasdaq Rules 5250 and 5606 pertaining to director compensation and board diversity
  • Failure to meet the continued listing requirements in Nasdaq Rule 5700 Series
  • Failure to meet Nasdaq’s continued listing requirement for minimum bid price
  • Failure to meet Nasdaq’s requirements for non-convertible bonds, REITs, and other specific types of assets
  • Failure to timely solicit proxies
  • Deficiencies under Nasdaq Rules 5605 and 5615 pertaining to Boards of Directors and Independent Audit Committees
  • Deficiencies under Nasdaq Rules 5620, 5630, 5635, and 5615 pertaining to shareholder meetings, shareholder approval, related party transactions, and corporate Codes of Conduct

While some grounds for delisting will be valid, Nasdaq’s decision to pursue suspension or delisting may also be misguided. Fortunately, Nasdaq recognizes this, and it has appellate procedures in place. When companies engage our firm for Nasdaq defense, our lawyers carefully scrutinize the facts at hand, conduct internal audits and investigations as necessary, and execute targeted defense strategies focused on protecting our clients’ Nasdaq listings as efficiently as possible.

We Defend Companies Against Nasdaq Delisting and Related Securities Law Allegations

We provide full-service defense representation for Nasdaq companies nationwide. If your company needs assistance with any of the following, we encourage you to contact us promptly to arrange a complimentary initial consultation with a Nasdaq defense lawyer:

Curing Nasdaq Rule Violations and Submitting Compliance Plans

Our lawyers help companies cure Nasdaq Rule violations and submit compliance plans for Nasdaq staff approval. We assist with determining what corrective measures are necessary, documenting cure efforts, and securing confirmation that companies’ compliance plans are adequate to prevent suspension or delisting.

Appealing Nasdaq Staff Delisting Determinations

We represent companies that need to appeal Nasdaq Staff Delisting Determinations. These notifications of deficiency present immediate and substantial risks, and company leaders must make informed and strategic decisions in order to protect their Nasdaq listings.

Defending Against DOJ and SEC Investigations

Frequently, companies that are facing Nasdaq delisting (or that have recently been delisted) will also face issues with the U.S. Department of Justice (DOJ) or the U.S. Securities and Exchange Commission (SEC). In addition to handling Nasdaq defense, our lawyers also have significant experience representing companies in federal securities fraud investigations.

Defending Against Civil and Criminal Securities Fraud Allegations

We represent companies in civil and criminal enforcement matters following DOJ and SEC investigations as well. When facing charges is unavoidable, companies must execute strategic defenses to avoid substantial penalties.

Fighting Shareholder Claims in Securities Litigation

Along with handling federal enforcement proceedings, we also serve as defense counsel for companies in private securities litigation. We defend companies in individual-plaintiff, class action, and multi-district litigation arising out of Nasdaq delistings and related matters.

FAQs: Defending Against Nasdaq Suspension or Delisting for Public Companies

Are Companies Required to Disclose Nasdaq Notifications of Deficiency?

 

Yes, Nasdaq notifications of deficiency are subject to mandatory disclosure under Nasdaq’s Rules and U.S. federal securities laws. As Nasdaq explains, “[a] Company that receives a notification of deficiency, Staff Delisting Determination, or Public Reprimand Letter is required to make a public announcement disclosing receipt of the notification and the Rule(s) upon which the deficiency is based, and describing each specific basis and concern identified by Nasdaq in reaching its determination that the Company does not meet the listing standard.” Depending on the nature of the deficiency, the company may be able to satisfy its disclosure obligation by issuing a press release, or it may need to file Form 8-K with the SEC.

How Can Companies Avoid Suspension or Delisting After Receiving a Nasdaq Notification of Deficiency?

 

The steps a company must take to avoid suspension or delisting after receiving a notification of deficiency from Nasdaq depend on the nature and accuracy of the allegations at hand. In some cases, companies will be able to avoid delisting by simply curing the deficiency at issue. In others, they may need to submit a compliance plan or file an appeal. Regardless of the circumstances presented, a proactive approach is essential, as it is up to the company to avoid delisting.

Can the DOJ and SEC Take Action Against Companies Based on Nasdaq Delisting?

 

While getting delisted does not itself violate federal securities laws, companies that get delisted will often face scrutiny from the DOJ or SEC (or both). If the issue that triggered delisting violates federal law, or if a company fails to properly disclose its delisting, this can lead to civil or criminal enforcement action.

Do Listed Companies Need to Engage Outside Counsel to Deal with Nasdaq?

 

Due to the risks involved, we strongly recommend that companies engage outside counsel to deal with Nasdaq when facing delisting. At Oberheiden P.C., we have significant experience representing publicly-traded companies in securities-related matters, and we can deal with Nasdaq (and the DOJ and SEC) on your company’s behalf.


Speak with a Nasdaq Defense Attorney in Confidence

For more information about how we help companies facing delisting from Nasdaq, contact us to arrange a confidential initial consultation. Call 888-680-1745 or request an appointment online to speak with a Nasdaq defense lawyer as soon as possible.

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