In the event that the SEC staff believes that a prospectus that has been submitted for review does not adequately explain the high-risk factors of an offering, it can:

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The SEC staff has the authority to issue a deficiency letter if they believe that the prospectus does not adequately explain the high-risk factors of an offering. This letter would delay the offering until more detail is provided to address the deficiencies identified by the staff. The other choices involve more drastic measures, such as barring the sale of the security or requiring shelf registration proceedings, and may not necessarily be appropriate for every situation where high-risk factors are not adequately explained.

In the Event That the SEC Staff Believes That a Prospectus