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Comment letters: too late to be much use at Shufflemaster…

Back in May 2005, the SEC began releasing comment letters on its site. But three years later, the system still doesn’t quite work because the only time they become available on the SEC site is after whatever issue the SEC is concerned about has already been resolved.

I thought about this while reading the revised 10K that Shufflemaster (SHFL) filed late yesterday. In the explanatory note, the company notes that it is revising a number of its footnotes in response to an SEC comment letter on the 10K, as well as on the company’s first quarter Q and proxy statements.

But here’s the problem. The original 10K was filed on Jan. 18. The 10Q was filed on Jan. 31 and the proxy on Feb. 15. While it’s not clear when the company received the comment letters, Shufflemaster stock has fallen steadily since the beginning of the year — a whopping 63% year-to-date.

And the only way investors know about these comment letters is because Shufflemaster chose to disclose them. They’re not yet available on the SEC site, which means it’s still considered to be an open issue. And even my friends at Disclosure Insight, which made a name for itself by finding these letters in advance via Freedom of Information Act requests, don’t have any details on Shufflemaster’s letters.

So while having access to the comment letters after the fact is better than not having access at all, it still seems like too little too late to be of much help. I’m betting there’s some Shufflemaster investors who would agree with me on this one.