SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 106159 / AUGUST 19, 2026 ADMIN. PROC. FILE NO. 3-22553
The following information was released by
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 106159 /
Admin. Proc. File No. 3-22553
In the Matter of the Application of
For Review of Action Taken by
OPINION OF THE COMMISSION
REGISTERED SECURITIES EXCHANGE REVIEW OF DELISTING
Applicant challenged
then delisting, the applicant's stock. Held, application for review is dismissed.
APPEARANCES:
Amir C. Tayrani,
Appeal filed:
Last brief received:
2
trading in, and then delisting,
determination, we sustain
I. Background
when an "event, condition, or circumstance" makes continued listing "inadvisable or
unwarranted"even when a company's securities otherwise meet all enumerated listing
criteria.1
condition made sustained future compliance unlikely despite
turnaround.
company that it had violated
closed below
issued five such notices to
within the 180-day cure periods that
conducting reverse stock splitsa 1:10 split in
November 2024.3
When
informed the company that it was ineligible for the standard 180-day cure period. Under the
"Excessive Split Rule"adopted in January 2025a company that has conducted a reverse
stock split within the prior year is not entitled to that cure period, and the
initiate the process for delisting the security at issue.4
that its securities would be suspended and delisted.
1
2 See
to maintain a minimum bid price of
meet the minimum bid price requirement exists if the deficiency continues for 30 consecutive
business days).
3 See
which to come back within compliance). If an issuer listed on the
not regain compliance within the initial 180-day compliance period, the rules provide the issuer
an additional 180-day cure period if certain criteria are met.
to regain compliance within the initial cure period.
4
split in the past year are ineligible for the standard 180-day cure period and
issue a Staff Delisting Determination under Rule 5810 with respect to that security).
3
submission,
automatic 180-day cure period but requested that the panel afford discretionary relief by granting
the company "a short exception within which to demonstrate compliance with"
criteria.6
After holding a hearing, the panel denied
specifically invoke the Excessive Split Rule in its decision. Rather, it addressed the relief that
deficiency. In denying
the company time to conduct another reverse stock split would enable long-term compliance
with
years and that two previous stock splits had achieved only temporary compliance. The panel
recognized that
the new operations would allow
panel therefore concluded that
confidence" and did not "justify yet another exception."
Panel's decision for review, and the council did so.7 Although Shineco had previously admitted
that the Excessive Split Rule rendered the company ineligible for the automatic 180-day cure
period, the company reversed course before the council and argued that applying the rule was
impermissibly retroactivecontending that a rule adopted in
applied to take into consideration a reverse stock split that occurred in
the rule's adoption.
consider the company's transformation plan.
On
Panel's decision. The council began by finding that the
act based solely upon the Company's latest Bid Price Rule violation"without applying the
Excessive Split Rule. As the council explained, the Excessive Split Rule's "only practical
effect" was to eliminate an automatic 180-day cure period, leaving the question of whether the
company should have more time in which to cure in the
understood this, asking the panel only to afford the company "a short exception" to regain
compliance. The council found that, given
Rule, the
5 The suspension and delisting were stayed pending the panel's review. See
5815(a)(1)(B) (providing that, if an issuer timely appeals a delisting determination to a
hearings panel, the suspension and delisting will ordinarily be stayed pending the panel's
review).
6 See
provide the issuer up to 180 days to cure its deficiency).
7 In ordering review, the council stayed the suspension pending that review.
4
nonetheless warranted. The panel had discretion under Rule 5101 to immediately suspend
trading and proceed with delisting notwithstanding any automatic cure period. As discussed
above, Rule 5101 authorizes
circumstance" makes continued listing "inadvisable or unwarranted," even when a company's
securities otherwise "meet all enumerated criteria for" continued listing, such as being eligible
for additional time to cure a deficiency.
The council found that standard satisfied here. According to the council,
"repeated cycles" of Bid Price Rule violations and multiple reverse stock splits that did "not
result in sustained compliance" raised significant concerns.
given
disputethat the company had "misrepresented its quarterly financial position to hide continued
losses, even after it had begun executing its transformation plan."
figures for two previous quartersduring which, it claims, it had begun a successful
turnaroundwithout noting that its reports filed with the Commission for those quarters showed
net losses from continuing operations of over
reflected a net loss from continuing operations of approximately
securities were delisted from
appeal challenging the
while the Commission reviewed
request because, among other things, the company failed to show a likelihood of success or raise
a serious legal question on the merits.8 We now turn to the merits of
II. Analysis
We review
conduct an independent review of the record to determine whether (1) the specific grounds on
which
action was in accordance with
manner, consistent with the Exchange Act's purposes.9
In conducting that review, we conclude that Rule 5101 provides an appropriate basis for
applied to it retroactively. But we need not address that argument because, even if that rule did
8
9 15 U.S.C. 78s(f); see also
5768703, at *10 (
decision). Section 19(f) also requires us to set aside
imposes an undue burden on competition. Id.
5
not apply to
misapplied the rule's standards.
process: that the
transformation plan. We address and reject those arguments below.
A. The specific grounds exist in fact, and
rules.
The record establishes the facts on which
not dispute them. Those facts in turn amply establish that
Rule 5101. That rule authorizes
makes continued listing "inadvisable or unwarranted"even when a company otherwise meets
all enumerated criteria. That was the case here.
including two instancesin February and November 2024in which
stock splits to cure its deficiencies, only for its securities to fall below
months. These circumstances established a pattern of
extended period, not sustaining compliance with a fundamental listing standard. That
compliance history was also combined with a transformation plan that, at the time of the
delisting decision, was undermined by the company's own conduct, as the
foundand
position to hide continued losses, with its own quarterly reports showing net losses from
continuing operations of over
of approximately
"circumstances" established that continued listing was "inadvisable" and "unwarranted"not
because any single factor was dispositive, but because the overall pattern demonstrated that it
was highly unlikely that
We reject
Rule deficiencies within the applicable periodsentitled it to another opportunity. Those cures
did not demonstrate a company capable of maintaining compliance. Each reverse stock split
produced only temporary relief before the bid price fell below
part of the circumstance that made continued listing inadvisable. Rule 5101 does not require
prior failure to cure before
conditions, or circumstances made continued listing inadvisableand here,
repeated violations and temporary cures plainly met that standard.
Because Rule 5101 independently supports
not (and do not) reach
10 See Shineco's Form 10-Q for the period ended
https://www.sec.gov/edgar/browse/?CIK=1300734 (
take official notice of any matter in its "public official records").
6
before the
B.
Act's purposes.
purposes. Exchange Act Section 12(d) provides that a security registered with a national
securities exchange "may be withdrawn or stricken from listing . . . in accordance with the rules
of the exchange."11 Section 6(b)(5) requires that national securities exchanges design their rules
to "perfect the mechanism of a free and open market . . . and . . . to protect investors and the
public interest."12
delist securities to maintain "public confidence in its market" and "protect investors and the
public interest" is consistent with these purposes.13
purposes. The Commission has emphasized the importance of
investor expectations regarding the nature of securities that have achieved an exchange listing,
and the role of an exchange in overseeing its market and assuring compliance."14 By relying on
Rule 5101 to deny
securities,
company's financial condition and repeated inability to comply with listing requirements. This
action protected investors who rely on those standards when making investment decisions.
securities, but asserts that
issuing its decision less than a day after the hearing and
company's compliance plan. For this case, we will assume but not decide that the constitutional
due process standard applies to self-regulatory organizations like
requirement is satisfied when two core elements are present: notice of the grounds for the action
11 15 U.S.C. 78l(d).
12 Id. 78f(b)(5).
13 See SmartHeat, 2014 WL 5768703, at *10 (finding that Rule 5101 is consistent with the
Exchange Act's purposes).
14 E.g., Notice Of Filing Of Amend. No. 1 And Order Granting Accelerated Approval Of A
Proposed Rule Change, As Modified By Amend. No. 1, To Modify Certain Initial Listing
Liquidity Requirements, 90 Fed. Reg. 12608, 12609 and n.24 (
Inc., Exchange Act Release No. 11291, 1975 WL 161326, at *2 (
future investors . . . [are] entitled to assume that the securities in the system meet the system's
standards. Hence the presence in
deceptive effect.").
7
and a meaningful opportunity to be heard.15 That standard was satisfied here.
notice and opportunity to be heard, and both the
in reasoned decision makingissuing written decisions that addressed
history, its transformation plan, and each of its legal arguments.16 The speed of
decision does not change this conclusion. The panel had
weeks before the hearing and received
itself. A prompt decision after a hearing at which the company had a full opportunity to be heard
is consistent with an efficient and fair proceeding.
duties under the parties' listing agreement. That claim falls outside the scope of this proceeding.
Exchange Act Section 19(f) limits our review to whether
rules and the Exchange Act.17 Questions of state law, including breach of contract and implied
covenant claims, must be pursued in the appropriate judicial forum.18
Finally,
based companies" is not supported by the record.
company that received more favorable treatment, and the record contains no basis for concluding
15 See Mathews v. Eldridge,
due process is the opportunity to be heard 'at a meaningful time and in a meaningful manner."'
(quoting Armstrong v. Manzo,
528-29 (4th Cir. 2011) ("Procedural due process provides merely a guarantee of fair
procedurestypically notice and an opportunity to be heard." (cleaned up)).
16 See 15 U.S.C. 78f(d)(2) (providing that in determining whether to prohibit or limit a
person's access to services, an exchange must "notify such person of, and give him an
opportunity to be heard upon, the specific grounds for [the] prohibition or limitation," and an
exchange's determination to prohibit or limit a person's access to services "shall be supported by
a statement setting forth the specific grounds on which the . . . prohibition or limitation is
based").
17 See generally id. 78s(f) (providing no mechanism for reviewing a claim that SRO
action breached a member agreement or implied covenant); cf. JJFN Servs., Inc., Exchange Act
Release No. 39343, 1997 WL 722029, at *4 (
theory of promissory estoppel or quasi-contract.").
18 See Blackbook Cap., Inc., Exchange Act Release No. 97027, 2023 WL 2351451, at *4
(
breached an implied contract are "outside the scope of a Commission proceeding" (cleaned up));
2019) (declining to consider defamation allegations as "outside the scope of this proceeding"),
aff'd, 816 F. App'x 703 (3d Cir. 2020);
1993 WL 538913, at *3 n.14 (
statutes must be pursued in other forums").
8
that
non-compliance.
Accordingly, we dismiss
issue.19
By the Commission (Chairman ATKINS and Commissioners PEIRCE and UYEDA).
Secretary
19 We deny Shinecos request for oral argument, because our decisional process would not
be significantly aided by oral argument. See Rule of Practice 451(a), 17 C.F.R. 201.451(a).
We have considered all of the parties contentions. We have rejected or sustained them to the
extent that they are inconsistent or in accord with the views expressed in this opinion.
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 106159 /
Admin. Proc. File No. 3-22553
In the Matter of the Application of
For Review of Action Taken by
ORDER DISMISSING APPLICATION FOR REVIEW OF ACTION TAKEN BY
REGISTERED SECURITIES EXCHANGE
On the basis of the Commissions opinion issued this day, it is
ORDERED that the application for review filed by
By the Commission.
Secretary
Insurance is a promise, and State Farm has let me down | Letter
ATTORNEY GENERAL TONG URGES CONNECTICUT INSURANCE DEPARTMENT TO REJECT DOUBLE-DIGIT HEALTH INSURANCE RATE HIKE REQUESTS
Advisor News
- Your client wants to cash out an annuity. Here’s what to consider
- How student loan debt impacts 401(k) balances
- The ‘sandwich generation’ faces compounded barriers to retirement savings
- Benefit Costs Squeeze Schools, Driving Cuts, Tax Hikes And Difficult Tradeoffs
- Why client insurance needs could change even if their life doesn’t
More Advisor NewsAnnuity News
- SS&C Black Diamond Expands Annuities & Insurance Marketplace with New Insurance Capabilities and Carriers
- Regulators urged to sharply limit hypothetical data in annuity illustrations
- Your client wants to cash out an annuity. Here’s what to consider
- Oklahoma Insurance Dept. helps Oklahomans recover unclaimed life insurance benefits
- Bitcoin gains ground in retirement market with Equitable annuity option
More Annuity NewsHealth/Employee Benefits News
Life Insurance News