Summary and Opinion: With new data reflected in this report, Zion Oil & Gas, Inc. is added to our Watch List of companies with undisclosed SEC investigations. It now appears the company misled investors when it said there is no SEC investigation back in March.
Facts of interest or Concern: On 26-Mar-2018, an individual unknown to us posted to Twitter an excerpt from a letter they claim to have received in response to a FOIA request made on Zion Oil & Gas. They used this as basis to state, “Zion Oil & Gas has an Undisclosed SEC Investigation. (Tweet excerpt below)
This is not a conclusion we would have made based solely on this single response to a FOIA request. We know from experience that only about 70% - 80% of the types of FOIA responses received and posted by this individual survive an administrative appeal.
When we tell you that a company has an undisclosed SEC investigation, it is because we have an appeal response that supports such a statement. This individual did not file an appeal. They simply went public with what we consider to be an indication of a possible investigation, not yet confirmed on appeal. Our latest data on Zion Oil & Gas is from an appeal.
Nonetheless, the tweet of 26-Mar-2018 was out there. The next day, on 27-Mar-2018, the company responded to it by saying, in part, “There is no SEC investigation.”
We had not researched Zion Oil & Gas prior to the above taking place. Using processes and procedures we long-ago perfected – and which investors have come to trust – we filed our own request on the company.
In a letter dated 06-Apr-2018, the SEC gave us a response to suggest the absence of recent SEC investigative activity at Zion Oil & Gas, Inc. With conflicting FOIA responses on the same company, received only weeks apart, and the company having issued a public denial, we decided it was prudent to publish the data provided to us. We did so, on 13-Apr-2018 (See, New Data Introduces Uncertainty Regarding SEC Investigative Activity at Zion Oil & Gas).
Now, in an appeal response dated 15-May-2018, on-going SEC enforcement proceedings were confirmed at Zion Oil & Gas, Inc. This has not been disclosed.
Our Take: An appeal response is the gold standard when it comes to SEC FOIA responses. In this case the appeal confirmed on-going enforcement proceedings. The problem for Zion Oil & Gas is they flatly denied it back in March. We’re going with the SEC on this one.
-- Probes Reporter®
Independent Investment Research Focused on Public Company Interactions with the SEC.
Notes: Disclosure Insight® reports provide commentary and analysis on public company interactions with investors and with the SEC. They are heavily reliant on our expertise in using the Freedom of Information Act. “Disclosure Games®” is a term we use to highlight those public companies engaging in disclosure practices that in our opinion may be misleading, confusing, evasive, or otherwise lacking the transparency needed for investors to make well-informed investment decisions regarding a potentially material exposure.