Common Mistakes for New Public Companies
Here is a link to a recent article in the Financial Post (http://business.financialpost.com/2013/02/19/just-done-an-ipo-here-are-some-common-mistakes-to-avoid/) which comes from the Ontario Securities Commission. It sets out some of the more common mistakes the Ontario Securities Commission has seen from newly listed public companies. The mistakes listed essentially boil down to: (i) not putting enough effort into compliance with rules and laws applicable to public companies; (ii) not understanding securities laws; and (iii) issues with disclosure, either by providing inappropriate disclosure or not providing disclosure on a timely basis.
We have seen a lot of issuers make a lot of mistakes and would put the disclosure issues at the top of the list in terms of importance. The other issues around the rules, securities laws etc. can often be dealt with by ensuring the company has good external advisors. In our view the disclosure obligations are something that management must really internalize and understand because, at the very least, they need to have a good sense of when to call on their external advisors for advice on whether and when disclosure is required.