A notification that is sent by the Securities and Exchange Commission (SEC) to a company to call off its initial public offering (IPO) because the registration statement is in violation of the securities law. However, a bedbug letter is not commonplace since registration statements, in most cases, are not fully compliant with the securities laws at the time of initial filing. The SEC reviews all fillings sent by companies, and if it finds shortcomings that cannot be fixed or removed, it usually issues a bedbug letter.