(CN) - Tara Gold Resources will have to live with the smear of the Securities and Exchange Commission's 2011 revocation of its Securities Act registration because the SEC did not block a new registration filed by the company, the 7th Circuit ruled.
     The three-judge panel agreed with the SEC that the fate of the revocation was moot because the commission had allowed the firm to file a new registration statement.
     The mining company had argued that the existence of the original revocation order and an SEC memo issued when the company filed a new registration statement led the Financial Industry Regulatory Authority to balk when broker-dealers asked for authorization to sell Tara Gold shares.
     Writing for the panel, Chief Judge Frank Easterbrook said, "Tara Gold has not cited any decision, by any court, holding that a case or controversy continues even after the effect of a revocation order has been undone by the stock's re-registration. We do not see a good reason to create such a precedent."
     The SEC began investigating Tara Gold in 2002 when it fell behind on its quarterly filings. The company was warned to catch-up, but over the next eight years it either failed to file or late filed eight quarterly reports and two annual reports.
     The company's financial situation was so dire it did not file its 2007 annual report until July 2010 and told the SEC at the time it did not have the cash to pay an auditor to certify more recent financial statements.
     On July 18, 2011 the SEC revoked Tara Gold's Securities Act registration, ending trading in the firm's shares.
     Tara Gold found the money to fight the SEC's order however and filed a petition for judicial review and a new registration statement with the commission.
     SEC staff wrote a 12 page memo flagging many material deficiencies in the company's statement but did not block the registration which became effective 60 days after it was filed.
     Easterbrook said that the court could not provide the relief Tara Gold really wanted, which was restoration of its reputation.
     "Nothing we could do would oblige FINRA to allow trading to resume. Nothing we could do would expunge the staff's comment letter, let alone the SEC's opinion," Easterbrook wrote, "Nor could a judicial decision ... prevent FINRA from thinking, as it evidently did, that Tara Gold's failure to come current in its filings renders it inappropriate for broker-dealers to make a public market in Tara Gold's securities."