Category: Rule 506

Rule 506: On December 4, 2013, the SEC updated its Compliance and Disclosure Interpretations (“C&DI’s”) including new guidance on the rules disqualifying bad actors from participating in Rule 506 offerings…

Apr172012

The JOBS Act Is Not Just Crowdfunding

On April 5, 2012 President Obama signed the JOBS Act into law.  In my excitement over this ground-breaking new law, I have been zealously blogging about the Crowdfunding portion of the JOBS Act.  However, the JOBS Act impacts securities laws in many additional ways.  The following is a summary of the many ways the JOBS Act will amend current securities regulations, all in ways to support small businesses.

A.       The New “Emerging Growth Company” Category

The JOBS Act will create a new category of companies defined as “Emerging Growth Companies” (EGC).  An EGC will be defined as a company with annual gross revenues of less than $1 billion, that has been public and reporting for a minimum of five years and whose non-affiliated public float is valued at less than $700 million.  EGC’s will have reduced requirements associated with initial public offerings (IPO’s) and ongoing reporting requirements.  For many purposes, EGC’s will be allowed to use the less

Jun162010

Direct Public Offerings And The Internet

In today’s financial environment, many Issuers are choosing to self underwrite their public offerings, commonly referred to as a Direct Public Offering (DPO). Moreover, as almost all potential investors have computers, many Issuers are choosing to utilize the Internet for such DPO’s. The Securities and Exchange Commission (SEC) has published rules for utilizing the Internet for an offering.

To comply with the SEC rules for electronic use, an Issuer must comply with the following minimum rules, among others:

  • An electronic prospectus must provide the same information as a paper written prospectus;
  • The Investor must elect to receive electronic delivery of the prospectus and must be provided with personal access codes to access electronic materials over the Internet;
  • The Investor must pre-qualify to receive the offering materials (such as being in a particular state, being accredited, etc.) prior to receiving access codes;
  • The Investor must be immediately notified of any amendments or changes in the offering documents; and
  • The Issuer must
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