In developments arising from the government shutdown, the SEC announced on Thursday Companies can proceed with IPOs using an obscure automated approval process, now with the added bonus of omitting pricing information altogether.
What’s happening is that after 90% of the SEC staff is furloughed, startups can file their paperwork and it will automatically go into effect after 20 days. This option was always there; Companies rarely use it because they prefer SEC reviewers to actually see their disclosures before they go public. The difference here is that the SEC will not penalize companies for omitting pricing details during the shutdown, making this solution more palatable.
To put it another way, testing is still going on, just like what happens after retail investors have already bought shares of a company, it seems. , , Not good, but perhaps we would be surprised to learn that investor protection works better after the money changes hands.
Companies remain legally liable for their disclosures, and the SEC may later demand amendments.
