Seems to me that an important question is whether the MUI was announced by Linn around the first of July, or was this this an announcement of the beginning of an "informal investigation" that might have been automatically triggered by the 60-day clock?
MUI can be terminated easily, but if this is not done within 60 days the SEC's computerized case tracking system automatically escalates the MUI to the status of an "informal investigation." At this point, private counsel usually advises the affected company that the informal investigation must be publicly disclosed -- with adverse consequences for the company's stock price--even though it may not have been based on any more information, or on any greater SEC staff consideration, than the original news article, complaint or tip that stimulated the MUI. It is important to note, however, that although the approval of a senior enforcement division official was necessary to open a MUI, no approval is necessary for a MUI to roll over into an informal investigation. Thus, informal investigations can be, and often are, opened without ever being touched by human hands; what started as a quick look for a potential violation has now become a disclosure item for the affected public company.
Finally, some helpful info. Thanks for the quote from the SEC Enforcement Manual. Do you remember when this MUI got started and what the expected date of termination or conversion to an investigation is? Thanks in advance.
All SEC investigations are conducted privately. Facts are developed to the fullest extent possible through INFORMAL INQUIRY, interviewing witnesses, examining brokerage records, reviewing trading data, and other methods.
With a FORMAL order of investigation, the Division's staff may compel witnesses by subpoena to testify and produce books, records, and other relevant documents. Following an investigation, SEC staff present their findings to the Commission for its review. The Commission can authorize the staff to file a case in federal court or bring an administrative action. In many cases, the Commission and the party charged decide to settle a matter without trial.