Category: Securities Attorneys

Securities Attorneys: Securities Attorneys focuses includes, but is not limited to, registration statements, including Forms 10, S-1, S-8 and S-4, compliance with the reporting requirements of the Securities Exchange Act of 1934, including Forms 10-Q, 10-K and 8-K, 14C Information Statements and 14A Proxy Statements, going public…

Mar152016

House Passes More Securities Legislation

ABA Journal’s 10th Annual Blawg 100

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In what must be the most active period of securities legislation in recent history, the US House of Representatives has passed three more bills that would make changes to the federal securities laws. The three bills, which have not been passed into law as of yet, come in the wake of the Fixing American’s Surface Transportation Act (the “FAST Act”), which was signed into law on December 4, 2015.

The 3 bills include: (i) H.R. 1675 – the Capital Markets Improvement Act of 2016, which has 5 smaller acts imbedded therein; (ii) H.R. 3784, establishing the Advocate for Small Business Capital Formation and Small Business Capital Formation Advisory Committee within the SEC; and (iii) H.R. 2187, proposing an amendment to the definition of accredited investor. None of the bills have been passed by the Senate as of yet.

Meanwhile, the SEC continues to finalize rulemaking under both the JOBS Act, which

Sep152015

SEC Issues Investor Alert Warning That Fantasy Stock Trading Websites May Violate Securities Laws

ABA Journal’s 10th Annual Blawg 100

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At the end of June, the SEC Office of Investor Education and Advocacy issued an Investor Alert and reminded us all that the net of federal securities laws is far-reaching.  The Investor Alert warns investors that fantasy stock trading and similar websites violate federal securities laws and, in particular, the “security-based swap” regulations enacted by the Dodd-Frank Act.

The SEC Investor Alert warns against websites that claim to offer a chance to make money from publicly traded or privately held companies without actually buying stock.  Generally the sites are set up as a “fantasy” trading game or competition and involve a small entry fee with the chance to win a larger payment if you win the fantasy competition.  The SEC has taken the position that these fantasy stock trading programs could potentially involve security-based swaps and implicate both the federal securities and commodities laws.  The SEC has and is continuing to investigate the

Sep082015

SEC Has Adopted Final Pay Ratio Disclosure Rules

ABA Journal’s 10th Annual Blawg 100

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On August 5, 2015, the SEC published and adopted final pay ratio disclosure rules.  The final rules are substantially the same as the proposed rules which were published in September 2013.  The rules will require inclusion of the new disclosures in proxy materials, registration statements and annual reports beginning in the fiscal year starting on or after January 1, 2017.    

The proposed new rules implement Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) by amending Item 402 of Regulation S-K.  The recently proposed “pay vs. performance” rules, which I discussed in my blog HERE would also amend Item 402.  As an Item 402 disclosure, the new pay ratio disclosure will also be the subject of the “say on pay” advisory vote.  My blog on say on pay for smaller reporting companies can be read Here.

Interestingly, in the final published rules, the SEC makes a

Aug182015

A Summary Of The 2015 Amendments To The Nevada Revised Statutes

ABA Journal’s 10th Annual Blawg 100

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Although the federal government and FINRA have become increasingly active in matters of corporate governance, the states still remain the primary authority and regulator of corporate law.  The two most popular states for incorporation by business entities remain Nevada and Delaware, both of which offer corporations a degree of flexibility from a menu of reasonable alternatives that can be tailored to the companies’ business sectors, markets and corporate culture. 

In 2015 the Nevada Legislature made several changes to the Nevada Revised Statutes (NRS) which impact public and private companies incorporated in Nevada.  The changes go into effect on October 1, 2015.  I begin this blog by reviewing the benefits offered by Nevada as a choice of state of incorporation and then follow with a summary of the 2015 amendments.

Nevada as a Choice of Corporate Domicile

Together with Delaware, Nevada is one of the most popular state choice for entity domicile.  The

Aug032015

SEC Proposed Executive Compensation Clawback Rules

ABA Journal’s 10th Annual Blawg 100

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On July 1, 2015, the SEC published the anticipated executive compensation clawback rules (“Clawback Rules”).  The rules are in the comment period and will not be effective until the SEC publishes final rules. The proposed rules require national exchanges to enact rules and listing standards requiring exchange listed companies to adopt and enforce policies requiring the clawback of certain incentive-based compensation from current and former executive officers in the event of an accounting restatement. 

In particular, the proposed rules implement Section 10D of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and as added by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).  Section 10D requires the SEC to adopt rules directing national exchanges to prohibit the listing of any security of an issuer that is not in compliance with Section 10D’s requirements for (i) disclosure of the company’s policy on incentive-based compensation that is

Jun012015

ABA Federal Regulation Of Securities Committee Makes Recommendations On Regulation S-K

ABA Journal’s 10th Annual Blawg 100

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On March 6, 2015, the Federal Regulation of Securities Committee (“Committee”) of the American Bar Association (“ABA”) submitted its second comment letter to the SEC making recommendations for changes to Regulation S-K.  The Committee’s recommendations are aimed at improving the quality of business and financial information that must be disclosed in periodic reports and registration statements in accordance with Regulation S-K.  I note that I am a member of the Committee, but not a member of the sub-committee that drafted the comment letter, nor did I have any input in regard to the comment letter.

The recommendations fall into four major categories: materiality; duplication; consolidation of existing interpretive and other guidance from the SEC; and obsolescence.  The recommendations in the letter are based on themes articulated by the Division of Corporation Finance in a 2013 report to Congress mandated by the JOBS Act and subsequent speeches by the Division’s Director, Keith F.

May192015

SEC Proposed Pay Versus Performance

ABA Journal’s 10th Annual Blawg 100

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On April 29, 2015, the SEC published the anticipated pay versus performance proposed rules.  The rules are in the comment period and will not be effective until the SEC publishes final rules.  Although timing is unclear, some commentators believe the new rules will be implemented as soon as the 2016 proxy season. 

The proposed rules require companies to clearly and concisely disclose the relationship between executive compensation actually paid and the financial performance of the company, taking into account any change in the value of the shares of stock and dividends of the registrant and any distributions.  The new proposed disclosure requirements will not apply to emerging growth companies or foreign private issuers.  In addition, smaller public companies will have a scaled back disclosure requirement. 

The proposed new rules implement Section 14(i) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and as added by Section 953(a) of the Dodd-Frank Wall

Apr142015

SEC Congressional Testimony- Part I

ABA Journal’s 10th Annual Blawg 100

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On three occasions recently representatives of the SEC have given testimony to Congress.  On March 24, 2015, SEC Chair Mary Jo White testified on “Examining the SEC’s Agenda, Operations and FY 2016 Budget Request”; on March 19, 2015, Andrew Ceresny, Director of the SEC Division of Enforcement, testified to Congress on the “Oversight of the SEC’s Division of Enforcement”; and on March 10, 2015, Stephen Luparello, Director of the Division of Trading and Markets, testified on “Venture Exchanges and Small-Cap Companies.”  In a series of blogs, I will summarize the three testimonies.  This first blog in the series summarizes the testimony of Mary Jo White.

Mary Jo White Testimony

On March 24, 2015, SEC Chair Mary Jo White gave testimony before the United States House of Representatives Committee on Financial Services.  The testimony was titled “Examining the SEC’s Agenda, Operations and FY 2016 Budget Request.”  As can be gleaned from the title, Mary

Mar312015

SEC Has Published Final Rules Adopting Regulation A+

ABA Journal’s 10th Annual Blawg 100

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On March 25, 2015, the SEC pleasantly surprised the business community by releasing final rules amending Regulation A. The new rules are commonly referred to as Regulation A+.  The existing Tier I Regulation A, which does not preempt state law, has been increased to $20 million and the new Tier II, which does preempt state law, allows a raise of up to $50 million.  Issuers may elect to proceed under either Tier I or Tier II for offerings up to $20 million.  As is becoming common in the industry, I will refer to the new rules, including both Tier I and Tier II offerings, as Regulation A+.

In its press release announcing the passage, SEC Chair Mary Jo White was quoted as saying, “These new rules provide an effective, workable path to raising capital that also provides strong investor protections.  It is important for the Commission to continue to look for ways

Aug122014

Corporate Communications During the Public Offering Process; Avoid Gun Jumping

The public offering process is divided into three periods: (1) the quiet or pre-filing period, (2) the waiting or pre-effective period, and (3) the post-effective period.  Communications made by the company during any of these three periods may, depending on the mode and content, result in violations of Section 5 of the Securities Act of 1933 (the “Securities Act”).  Communication related violations of Section 5 are often referred to as “gun jumping.”  All forms of communication could create “gun jumping” issues (e.g., press releases, interviews, and use of social media).  “Gun jumping” refers to written or oral offers of securities made before the filing of the registration statement and written offers made after the filing of the registration statement other than by means of a prospectus that meet the requirements of Section 10 of the Securities Act, a free writing prospectus or a communication falling within one of the several safe harbors from the gun-jumping provisions.

Section 5(a) of