News & Analysis as of

SEC Commissioner Gallagher, The Bad Boy Provisions and Remedies

Waivers from the automatic disqualifications of the “bad boy” provisions which can come into play following the resolution of a Commission enforcement action is a topic of increasing concern. Consider the recent decision...more

SEC Proposes Rules to Implement JOBS Act Relief From Exchange Act Registration Requirements

In December 2014, the Securities and Exchange Commission (SEC) proposed rules to implement Title V and Title VI of the Jumpstart Our Business Startups Act (JOBS Act), which permit early stage companies to defer registration...more

Massachusetts Adopts Intrastate Crowdfunding Rules, Effective Immediately

The Massachusetts Securities Division has recently joined a number of other states in adopting a “crowdfunding” exemption from securities registration requirements for certain offerings made within the Commonwealth, with the...more

SEC Chair Directs Staff to Review Commission Rule Excluding Conflicting Proxy Proposals

On January 16, Securities and Exchange Commission Chair Mary Jo White announced that she has directed the SEC’s staff (Staff) to review Rule 14a-8(i)(9) promulgated under the Securities Exchange Act of 1934, which allows an...more

First Reg A Issuer to Complete State Review Process Would Do It Again

This Growth Capital Investor article references Smith Anderson attorneys Benji Jones and Merrill Mason. A company that focuses on micro-lending for independent builders in real estate is now the first Reg A issuer to...more

SEC Eases Terms for 5-Day Debt Tender Offers

The SEC recently provided no-action relief for five-day tender offers. The new no-action letter eases requirements in the following areas: - The tender offer must be open for five business days rather than a seven to...more

SEC Charges Attorney For Allegedly False Legal Opinion

Last week, the Securities and Exchange Commission announced charges against an attorney who was allegedly involved in the filing of false registration statements.  The SEC’s order instituting proceedings alleges that the...more

SEC Proposes New Exchange Act Registration Thresholds and Changes to Certain “Held of Record” Definitions

On December 18, 2014, the Securities and Exchange Commission proposed new rules regarding the thresholds at which issuers may become reporting companies under Section 12(g) of the Securities Exchange Act of 1934, as amended...more

Byzantium and the Alstom FCPA Settlement – Part III

Porphyry is a type of stone that was much favored in the Roman world. In a review of several books in the New York Review of Books, entitled “The Purple Stone of Emperors”, Peter Brown looked into the history of the lithic in...more

Federal Crowdfunding Efforts Stall While Tennessee Prepares for Takeoff

On January 1, 2015, pursuant to the Invest Tennessee Exemption (ITE), crowdfunding in Tennessee became legal, granting Tennessee-based companies and investors increased access to capital and broadened opportunities to invest....more

Do I Need to Update My D&O Questionnaire for 2015?

One of the most frequent questions we get this time of year is issuers asking whether there are any needed updates to director and officer questionnaires. Necessary modifications are usually driven by changes to stock...more

SEC Files Another Offering Fraud Action

A business man, a real estate company he acquired from his grandfather, a registered representative who has now been barred by FINRA from the securities business and Maryland Division of Securities from the advisory business...more

The Next Wave of Proxy Access Proposals: What Issuers Should Know and How They Can Prepare

The Comptroller of the City of New York, who oversees pension funds with a combined $160 billion in assets, recently submitted proxy access shareholder proposals at 75 U.S. public companies as part of its Boardroom...more

SEC Scrutiny of Crowdinvesting Sites Not Registered as Broker-Dealers

On November 10, 2014, the SEC announced a settlement with Eureeca Capital SPC, which is a crowdinvesting portal incorporated in the Cayman Islands. Eureeca’s website seeks to match foreign-based issuers with investors...more

Blog: SEC Staff Issues CDI Regarding Use Of The Internet In Connection With Intrastate Offerings — How Feasible Is It?

The SEC staff has posted another new CDI regarding internet communications, this one advising how issuers may conduct intrastate offerings under Rule 147 and still use the internet to communicate offers. The question is...more

Deadlines Applicable to Colleges and Universities Approaching for Participation in SEC’s Continuing Disclosure Cooperation...

On March 10, 2014, the Securities and Exchange Commission (“SEC”) announced a voluntary self-reporting program for issuers and underwriters of municipal bonds for reporting of inaccurate statements made in offering documents...more

When is a Consultant an Executive Officer? – SEC Brings Another Case

The SEC has instituted administrative proceedings against a registrant and others alleging that two individuals with prior law violations secretly controlled the operational and management decisions of the registrant while...more

How the MCDC Initiative affects bond issuers and borrowers

If you have ever issued (or borrowed the proceeds of) bonds then you should know about the Municipalities Continuing Disclosure Compliance Initiative (the “Initiative”) and take the appropriate steps to determine your...more

EY Sanctioned For Acting As An Advocate For Audit Clients

Auditor independence is critical. The opinion issued by the audit firm regarding the financial statements of an audit client represents in part that the firm is independent. That judgment is based on an assessment of all the...more

Deadline Approaching for Disclosure of Continuing Disclosure Violations

The Securities and Exchange Commission (the SEC) recently launched its Municipalities Continuing Disclosure Cooperation Initiative (the MCDC Initiative). Obligated persons (including issuers and conduit borrowers) and...more

Can You Raise Money From Investors Who Are Not “Accredited Investors”?

A question I receive frequently from entrepreneurs raising capital for the first time is whether they can raise money from people who do not meet the SEC definition of “accredited investors.” The easy answers are “you...more

SEC Charges Auditor of PRC Firm With Unprofessional Conduct

The Commission filed another proceeding against an audit firm and its partners arising out of the audit of a PRC issuer. Unlike earlier actions involving audit firms for Chinese issuers, in this case the difficulties did not...more

SEC Issues Guidance on Determination and Verification of Accredited Investor Status

On July 3rd, the SEC issued guidance in the form of six new compliance and disclosure interpretations regarding accredited investor status. Two of the C&DIs relate to the calculation of income and assets for purposes of...more

SEC Staff Provides Rule 506(c) Verification Guidance

The SEC Staff recently provided further guidance on the provisions of Rule 506(c) of Regulation D which permit the use of general solicitation and general advertising when sales are made only to accredited investors and the...more

Municipalities Continuing Disclosure Cooperation Initiative (MCDC)

We want to make you aware of a new Securities and Exchange Commission enforcement initiative that impacts issuers of municipal bonds or other governmental securities or other persons obligated to provide secondary market...more

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