According to a filing to the SEC, the Chinese technology provider revealed it had received a notice from the regulator earlier in the month.
The Wells notice is a warning that staff are going to recommend that the organisation pursues charges against a company or body - the SEC then has to confirm the charges for a law suit to go-ahead.
In the filing, which was quoted by the Financial Times, the firmâs statements from the last three years âare now considered unaudited and the company does not have any reports with current reliable financial information available to the investing public. Therefore Longtop is delinquent in its reporting obligations under securities lawsâ.
The SEC is also expected to consider whether to suspend or revoke Longtopâs securities licence.
Trading in Longtopâs shares was stopped by the SEC in May after auditor Deloitte Touche resigned - it is thought that the latter took the step after it claimed it had found irregularities connected to Longtopâs accounts.
By Jim Ottewill