Imagine a public company, registered with the SEC, that has no revenues and limited assets (if any). That’s a fair description of your typical public shell company. According to a WSJ article, the SEC is getting heat for allowing these types of companies become registered in the first place but insists that it has “limited powers when it comes to blocking an initial public offering of stock—no matter how flimsy a company may look on paper.”
In a statement, the SEC said it has begun asking new shell companies how they plan to meet federal requirements for preparing audited financial statements. The agency said it also is looking more closely at the role of outside auditors at such companies.
