LegacyXChange had its securities revoked by the Securities and Exchange Commission (SEC) for failing to file required reports to the agency for four years.
Legacy is an inactive shell company that operates an online platform for buying and selling sports-related products through live auction. After filing to go public in April 2016, Legacy notified the SEC in June 2016 it would be completing its first report late.
“[B]etween July 2016 and November 2020, Legacy failed to file that report, any other required periodic reports, or any additional Forms 12b-25 to notify the commission that it needed additional time to file its periodic reports,” the SEC said in an administrative proceeding Tuesday.
The agency issued an order instituting proceedings (OIP) to Legacy in September 2020 for failing to file timely reports. It then ordered the company to cease trading for two weeks.
Three months later, Legacy filed an annual report for the one year ending March 31, 2016. Legacy then filed 19 additional delinquent reports, the SEC said.
The company initially “failed to timely file an answer” to the OIP and only did so after the SEC asked it to show cause as to why its registration shouldn’t be revoked, the agency said. Legacy then failed to timely file seven additional reports that came due after the SEC issued the OIP.
Legacy admitted it wasn’t in compliance with reporting rules for the four years and blamed the failure on financial difficulties related to mishandled funds regarding two lawsuits from a former consultant, according to the SEC.
Legacy told the SEC it has since submitted all past-due reports, is currently in compliance with reporting requirements, and secured financing to enable it to stay in compliance. The agency believes otherwise, stating the company’s financial difficulties don’t excuse “its repeated violations of periodic filing requirements.”
The SEC denied Legacy’s request for summary disposition and revoked all classes of registered securities as of Wednesday, according to the order.
The “revocation is the proper remedy for Legacy’s violations because they were serious, recurrent, and reflect a high degree of culpability,” the agency said. “… Legacy has not adequately ensured future compliance or made credible assurances against future violations.”
Legacy did not respond to a request for comment.