WOODBRIDGE, N.J., May 26, 2026 /PRNewswire/ — Lucosky Brookman LLP, a national law firm with leading capital markets, corporate finance, and commercial litigation practices, today announced that it has submitted a formal comment letter to the U.S. Securities and Exchange Commission in response to Nasdaq’s proposed rule change, which would adopt a new continued listing requirement for issuers that would provide for the immediate suspension and delisting of securities that fail to maintain a minimum Market Value of Listed Securities (“MVLS”) of at least $5 million for a period of thirty (30) consecutive business days.

The firm’s comment letter, submitted on May 21, 2026, provides a detailed, practitioner-driven analysis of the proposal, emphasizing that while the objective of maintaining high-quality markets is important, the rule as currently structured may produce unintended and adverse consequences for microcap and emerging growth issuers, as well as the investors who participate in those markets.

“There’s a real disconnect here,” said Joseph Lucosky, Managing Partner of Lucosky Brookman LLP. “You have policymakers saying they want more companies going public, more innovation, more access to capital, and at the same time, you’re proposing a rule that could systematically push hundreds of those same companies out of the market. “

Lucosky pointed to market data illustrating the scope of the potential impact across the current public company landscape.

“If you actually look at the data, this isn’t a fringe issue,” he said. “You’ve got 165 companies already below $5 million, another 315 between $5 and $20 million, and 242 between $20 and $50 million; that’s 722 public companies living in this zone. So when people talk about this rule, they should be clear: you’re not targeting outliers, you’re putting a meaningful portion of the U.S. microcap market at risk.”

Drawing on its experience advising issuers, investment banks, and market participants across IPOs, uplistings, direct listings, and capital formation strategies, the firm’s letter outlines several key concerns with the proposal:

• Reliance on a volatile metric: Market value is driven by trading dynamics and external conditions, not solely by issuer fundamentals.
• Absence of a cure period: The rule eliminates the ability for issuers to recover from temporary dislocations.
• Potential for manipulation: The structure will incentivize sustained downward pressure by short sellers during the measurement period, something the Exchange has tried to prevent and protect against.
• Negative investor impact: Immediate delisting will push investors into less liquid and less transparent markets and will hurt the very investors the Nasdaq is charged with protecting in favor of large institutional short sellers.
• Disproportionate impact on microcaps: The rule risks creating a self-reinforcing cycle of declining value and reduced access to capital.

“The real problem is the downward spiral this creates,” Lucosky added. “Once a company starts drifting toward that threshold, liquidity dries up, investor confidence pulls back, and short pressure builds. At that point, the rule doesn’t just measure market value; it starts driving it. And that’s how you end up forcing companies out of the market regardless of their underlying business.”

“When you’re talking about 722 companies across every sector and every state, this goes way beyond listing standards,” he continued. “You’re talking about jobs, innovation, and access to growth capital. A rule like this doesn’t just impact companies, it reshapes the ecosystem in a way that runs directly counter to the broader goal of expanding the public markets.”

The firm emphasized that the status quo should remain in place, with an independent hearings panel determining whether a company should remain listed. Listing decisions should not be driven by automatic triggers that effectively allow the exchange to pick winners and losers based on short-term market movements.

Lucosky Brookman’s submission reflects its broader role at the center of the microcap and emerging-growth ecosystem, where regulatory developments directly affect companies’ ability to access capital and scale. The firm continues to actively engage in industry and policy discussions, advocating for frameworks that preserve market integrity while maintaining practical and accessible pathways to the public markets.

About Lucosky Brookman LLP
Lucosky Brookman LLP has pioneered a hands-on, end-to-end approach to guiding entrepreneurial, emerging growth and public companies through complex legal and business challenges. Built on the belief that clients need more than legal advice, the firm leads strategy, coordinates stakeholders, and executes across the full corporate lifecycle, serving as the central point of command for transactions, litigation, and regulatory matters. Headquartered in the New York metropolitan area with attorneys across the country, Lucosky Brookman represents domestic and international clients across capital markets transactions, mergers and acquisitions, financing matters, complex commercial and securities litigation, white collar and regulatory matters, and insurance coverage and defense, with a relationship-driven, results-focused approach centered on accountability, execution, and long-term partnership.

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