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Category Archives: Securities Registration

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Is There a Light at the End of the Tunnel? CRD Black Hole May be Ending…

Posted in Broker-Dealer Regulation, Compliance and Supervision, Registered Representatives, Securities Registration

Brokers may finally see the light at the end of the expungement tunnel.  Over the last month, registered representatives have received some surprisingly good news relating to their CRD licensing records.  In August 2012, the United States District Court for the Northern District of California granted a motion by E-Trade Securities LLC to expunge an… Continue Reading

JOBS Act-ion: SEC Publishes Proposal for New Rule 506

Posted in JOBS Act, Securities Registration

Yesterday, the SEC proposed rules to implement Section 201(a) of the JOBS Act, which mandates the elimination of the prohibition against general solicitation in Rule 506 and Rule 144A offerings.  The proposed rule answered the major questions securities professionals were asking about these reforms:  would the new Rule 506 replace the old (no), would “reasonable… Continue Reading

IS IT POSSIBLE TO FIND CAPITAL FORMATION SUCCESS OVERSEAS?

Posted in Corporate Governance, Dodd-Frank, Financial Industry Trends, SEC Organization, Securities Legislation, Securities Registration

In its never ending quest to find suitable ways to address capital formation issues in the United States, the SEC’s Division of Corporation Finance is looking to see if foreign jurisdictions handle some of these issues better and if it could be applied in the United States.  For example, the SEC is looking to see if other… Continue Reading

No More Felons and Other Bad Guys in Regulation D Offerings

Posted in Compliance and Supervision, Corporate Governance, Dodd-Frank, Federal and State Criminal Activities, JOBS Act, SEC Compliance, SEC Enforcement, Securities Registration

Recently, the SEC announced that it would take steps to bar felons and bad actors from any Regulation D offering.  This rule was mandated by the Dodd-Frank Act, and the SEC issued the proposal last May 2011.  This new rule may be in place before the end of this year, but there is no certainty… Continue Reading

Condo Rental Programs Are Not Investment Contracts

Posted in JOBS Act, Securities Class Actions, Securities Legislation, Securities Registration

In an intriguing case out of the United States District Court for the Western District of Missouri, a plaintiff’s purchase of condominium units with an option to participate in the rental program did not involve an investment contract under either the federal or Missouri securities laws.  The court, thus, dismissed the plaintiff’s securities claims.  The… Continue Reading

CAYMAN ISLANDS FUND REGISTRATION REQUIREMENTS

Posted in Financial Industry Trends, Hedge and Private Equity Funds, Investment Adviser Regulation, JOBS Act, Securities Legislation, Securities Registration

The Cayman Islands will amend a 2011 law to clarify that master funds will now have to register if they have even one Cayman regulated feeder fund.  This registration will have to take place with the Cayman Islands Monetary Authority.  Previously, the Neutral Funds Law that was effective in December 2011, stated that, if there… Continue Reading

Jim Gets Interviewed by LXBN TV, Looks Oddly Angry

Posted in Financial Industry Trends, JOBS Act, Registered Representatives, Securities Legislation, Securities Registration

Colin O’Keefe at LXBN TV recently asked me a few questions about crowdfunding, the hype around it and what it might really look like.  At first glance, I look kind of pissed off – do I always scowl like that? – and more interested in something happening on the table.  But – despite appearances – I honestly enjoyed myself… Continue Reading

NEW EFFORTS TO ASSIST IN CAPITAL RAISING

Posted in Corporate Governance, Dodd-Frank, JOBS Act, Securities Legislation, Securities Registration

Recently, the SEC’s Division of Corporation Finance Director indicated that the SEC was reviewing certain issues in an attempt to assist small businesses with capital formation.  The SEC is assessing a number of initiatives, including, but not limited to, if the number of shareholders, currently 500, triggering reporting requirements could be increased.  Some have suggested… Continue Reading

Lawyer Full Employment Act – Insider Trading, Hedge Funds and the FCPA

Posted in Broker-Dealer Regulation, Compliance and Supervision, Federal and State Criminal Activities, Financial Industry Trends, Hedge and Private Equity Funds, JOBS Act, SEC Enforcement, Securities Registration, State Enforcement

Recently, the Department of Justice and the Federal Bureau of Investigation indicated that they are working on enough insider trading cases regarding the hedge fund industry to take them five years or more to complete.  This clearly indicates that the DOJ and FBI are going to continue to find insider trading actions with hedge funds. … Continue Reading

Cutting Through the Crowdfunding Hype

Posted in Compliance and Supervision, Financial Industry Trends, JOBS Act, Registered Representatives, Securities Legislation, Securities Registration

Like many others, my interest in the JOBS Act really started with crowdfunding.  This is probably because securities law is an imposing tangle of archaic acts, byzantine regulations and repetitive rules.  (Securities lawyers commonly say things like “…Rule 506 under Regulation D, promulgated pursuant to Section 4(2) of the ’33 Act…” and expect you to… Continue Reading

Emerging Growth Companies – A Bigger Deal Than You Might Think

Posted in Corporate Governance, Dodd-Frank, JOBS Act, Sarbanes-Oxley, Securities Legislation, Securities Registration

Today’s post is the penultimate of this series covering the recently signed JOBS Act, and covers the Act’s Title I – Reopening American Capital Markets to Emerging Growth Companies.  Check back later this week for more on Crowdfunding and a recap on who the JOBS Act really helps and who needs to be watch out. Or, instead of… Continue Reading

It’s Official! The JOBS Act of 2012 and Changes to Reg A and Reg D

Posted in Corporate Governance, Dodd-Frank, JOBS Act, SEC Compliance, Securities Legislation, Securities Registration

This post is a continuance of a series reviewing the JOBS Act.  For more on the registration requirement threshold shift from 500 to 2000 investors, click here.  For Jim’s initial analysis of Crowdfunding, click here.  Check back later for a flushed-out analysis of Title I of the Jobs Act, which creates the “Emerging Growth Company” classification.   … Continue Reading

The JOBS Act – Will Obama’s Signature Be An Execution Order for IPOs?

Posted in Compliance and Supervision, Dodd-Frank, Financial Industry Trends, JOBS Act, SEC Compliance, Securities Legislation, Securities Registration

Last week, I wrote about the Crowdfunding portion of the JOBS (Jumpstart Our Business Startups) Act, which was.  This week, I will try to review the rest of the Act in a series of posts.  Today: an overview and Title V (Private Company Flexibility and Growth).  Tomorrow, I’ll cover Titles II and IV, which give… Continue Reading

Jobs Act Backlash

Posted in Compliance and Supervision, Dodd-Frank, JOBS Act, Sarbanes-Oxley, Securities Legislation, Securities Registration

Gail Collins weighed in on the JOBS Act today in a column glibly titled “The Senate Overachieves”.  Normally, I love her work – everything she does is glib, and I honestly feel there is a glib shortage in America – but this time I believe her winking nonchalance has descended into full-on flippancy.  Worse than… Continue Reading

Houses Passes JOBS Act… again. Yay? I guess?

Posted in Dodd-Frank, Financial Industry Trends, JOBS Act, SEC Compliance, Securities Registration

The House passed the JOBS (Jumpstart Our Business Startups) Act today, a package bill aimed to make it easier for small businesses and start ups to raise capital.  This is obviously a momentous occasion, right? Not quite.  As it turns out, the House has already passed most (4 out of 6) of the provisions of this bill… Continue Reading

New Businesses and Obtaining Money

Posted in Corporate Governance, Hedge and Private Equity Funds, Securities Registration

Often, we are asked to consider assisting clients in obtaining funds for their start-up businesses.  Before asking for money, new businesses must have an understanding as to their business plan, need funding, and disposition of said funds.  Accordingly, new businesses must develop an understandable business plan.  Further, these entrepreneurs must consider the amount of capital necessary… Continue Reading

Argentinean Bond Dispute Has Gotten Hot

Posted in Securities Class Actions, Securities Registration

Buenos Aires, it is not, but the United States Supreme Court recently requested that the United States Solictor General provide an opinion involving a dispute between certain parties over the proprietary of certain Argentinean bonds. The dispute involves funds belonging to the Argentinean central bank held in the United States.  The United States Court of Appeals for the… Continue Reading

SEC Rules on Reverse Merger Companies

Posted in Corporate Governance, SEC Compliance, SEC Enforcement, Securities Registration

Responding to numerous complaints, especially, regarding companies operating from the People’s Republic of China, the SEC has determined that it will tighten the listing requirements for companies involved in reverse mergers.  In particular, these new regulations will effect those companies listed on the Nasdaq, New York Stock Exchange, and the NYSE Amex.  As many know,… Continue Reading

The SEC Celebrates Solstice with New Rules for Accredited Investors

Posted in Compliance and Supervision, Dodd-Frank, SEC Compliance, Securities Registration

The SEC released two new rules yesterday: one on mine safety (I wonder how many securities lawyers have ever set foot in a mine) and the other changing the net worth standard for accredited investors.  Both new rules come to us courtesy of Dodd-Frank.  Because mine safety disclosure isn’t really my forte, I’ll focus on accredited… Continue Reading

FINRA’S Proposed Private Stock Offering Rule

Posted in Broker-Dealer Regulation, Compliance and Supervision, FINRA Compliance, Securities Registration

FINRA proposed a rule for SEC approval that would require FINRA’s membership, involved in a private stock offering, to provide detailed information on the transaction to investors prior to the sale, as well as to file such information with FINRA 15 days before the first sale. This proposed Rule 5123 would require that offering materials… Continue Reading

Attorney Beware: Corp Fin Provides Guidance on Legal Opinions

Posted in SEC Compliance, Securities Registration

The Division of Corporation Finance, recently, provided guidance on preparing legal and tax opinions for registered securities offerings. Initially, Corp Fin stated when such opinions must be filed, and the content of those opinions.  The Staff referred to Staff Legal Bulletin No. 19 that discussed the opinion requirements, and its views regarding the required elements… Continue Reading