On October 5, 2016, the SEC unceremoniously dropped a long-standing requirement that
issuers affirmatively state that they will not raise the SEC review
process and acceleration of effectiveness as a defense to legal
The so-called Tandy representations (named in honor of the first
issuer that the SEC required to make them) required each issuer, in
a letter responding to SEC staff comments to a registration
statement or an amendment, to acknowledge that:
It is responsible for the adequacy and accuracy of the
disclosure in its registration statement;
SEC Staff comments or changes to disclosure in response to
Staff comments in its registration statement reviewed by the Staff
do not foreclose the SEC from taking any action with respect to the
registration statement; and
It may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any party under the federal
securities laws of the United States.
Presumably, the SEC required the Tandy acknowledgement to
preclude an issuer from claiming as a defense in an administrative
proceeding or lawsuit that the SEC staff impliedly approved
particular disclosure in a registration statement because the SEC
did not object to it in a comment letter or as part of its review
Eliminating the Tandy representations, of course, does not let
issuers off the hook. Indeed, the staff said it will remind
issuers that they are responsible for the accuracy and adequacies
of their disclosures, regardless of any review, comments, or action
or inaction by the SEC staff. But, this has always been the
No one will miss the Tandy representations. Tandy
representations: R. I. P.
Because of the generality of this update, the information
provided herein may not be applicable in all situations and should
not be acted upon without specific legal advice based on particular
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