The penalties stem from a November 2021 disclosure that the regulator ruled incomplete and “calculated to be misunderstood” under the Securities Regulation Code.
What happened?
The SEC said NOW’s filing gave investors the impression that a big government fee dispute was irrelevant to the company, even though the case involved NOW Telecom — which accounts for 97.82 percent of NOW Corp.’s assets.
In simple terms, the SEC believes NOW downplayed a risk that could matter to shareholders, rather than clearly explaining what was at stake.
Regulators rejected NOW’s use of the sub judice rule, saying the company should have disclosed the substance of the dispute even if the case was pending in court.
The SEC added that later corrections did not fix the problem because investors had already traded for more than a month based on the earlier statement.
The Commission also ordered its Enforcement and Investor Protection Department to check whether other NOW directors could face personal liability.
NOW to appeal
In a stock exchange filing on Monday, NOW Corp. said it will appeal the ruling before the Court of Appeals, arguing that no penalties should attach while the underlying National Telecommunications Commission case remains unresolved.
The company reiterated that the total P2 million fine does not affect its financial condition or operations while litigation continues.
—Edited by Miguel R. Camus
