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CorpFin

SEC Further Expands Ability To File Confidential Registration Statements

The SEC’s Division of Corporation Finance has expanded the ability to file non-public confidential registration statements to include all registration statements.

In 2012, the JOBS Act created a path for emerging growth companies to file draft registration statements (DRS) on a confidential basis when completing an initial public offering.  In 2017 the Division of Corporation Finance expanded the DRS filing option to include all Section 12(b) Exchange Act registration statements (but not 12(g) registrations), all registration statements for initial public offerings, and follow on offerings completed within 12 months of an initial public offering, for all class of issuers.  See – HERE.

On March 3, 2025, the Division of Corporation Finance announced that it has further expanded the ability to utilize a DRS filing to include:

  • Initial registrations under the Exchange Act, including both Sections 12(b) and 12(g) including Forms 8-A, 10, 20-F and 40-F;
  • All Securities Act of 1933 (Securities Act) registration statements regardless of the amount of
Read More »
March 25, 2025
Chair of the SEC Mr. Uyeda

Widespread “Dealer” Litigation Is Almost Over!

In August 2024, then SEC Commissioner Mark T. Uyeda made a public statement against the rampant enforcement proceedings against small cap investors claiming violations of the dealer registration requirements (see HERE).  Fast forward to today, now Chair of the SEC, Mr. Uyeda, is sticking by his contentions and finally, after eight long years of numerous enforcement proceedings, is directing the SEC to roll back its position.

What Happened

This week, the SEC enforcement division entered into two joint motions halting ongoing litigation claiming violations of the dealer registration rules.  The U.S. District Court for the District of Massachusetts entered an order in the case involving Auctus Fund Management staying the case while the parties wrap up an agreement to end the litigation.  Under the agreement Auctus will not seek attorney fees from the government or pursue a review of the enforcement action.

In the filing, Auctus said “[T]he parties have reached an agreement in principle to dismiss this

Read More »

March 18, 2025
Broker Dealer

SEC Chair Uyeda Talks SEC Priorities

Just a few weeks after SEC Commissioner Hester Peirce gave some insight into the SEC’s priorities (see HERE), acting SEC Chair Mark Uyeda got more granular on what we can expect under his regime.  Commissioner Uyeda drilled down on particular SEC goals while giving a speech at the Florida Bar’s Annual Federal Securities Institute and M&A Conference.

The overarching goal of the SEC over the next few years will be to foster innovation, job creation and economic growth by maintaining cost effective regulations throughout a business’s life cycle.  To accomplish these goals, the SEC intends to “return normalcy” to the SEC by being cognizant of its legal authority, policy priorities and enforcement initiatives, all of which have gone awry over the last few years.

Commissioner Uyeda highlights some of the actions already taken to facilitate these goals, including rescinding Staff Legal Bulletin 14 related to shareholder proposals and proxy statements (for more on Staff Legal Bulletin 14 see

Read More »

March 11, 2025
CEO Pay Ratio Disclosure Rules

Commissioner Peirce Gives A Sneak Peak At SEC Priorities

At the end of January 2025, SEC Commissioner Hester Peirce, who finally is not on an island alone within the SEC top brass, gave a speech at the Northwestern Securities Law Institute giving some insight into what we can expect from the SEC under the new administration.

Commissioner Peirce has been vocal over the years about her disdain for bringing political and social issues into SEC reporting and compliance management for public companies, however now, working with like-minded executives, she has solid ideas for a path forward.  First and foremost, a public company should have the goal of maximizing value for its shareholders as a group.  Unfortunately, in today’s world, public companies are often forced to answer to activists, non-shareholder “stakeholders” and the like, forcing executives to utilize company resources to further these groups (or individual’s) favorite cause.  Commissioner Peirce notes that “[D]irectors and executive officers serve shareholders and society best by keeping the companies they guide focused on

Read More »

March 4, 2025
Climate Disclosure Rules

Climate Disclosure Rules On The Way Out

On February 11, 2025 SEC Chairman Mark T. Uyeda issued a statement on the Enhancement and Standardization of Climate-Related Disclosure for Investors rule (“Climate Disclosure Rule”) adopted by the SEC on March 6, 2024 and later stayed as a result of ongoing litigation.

Commissioner Uyeda reiterated both he and Commissioner Peirce’s consistent view that the current disclosure rules are sufficient to cover any material climate related disclosures.  Furthermore, the Climate Disclosure Rule lacks statutory authority, SEC expertise and goes beyond the SEC’s arena of capital market regulation.

Commissioner Uyeda points out (and I whole-heartedly agree) that the Climate Disclosure Rule would require a large volume of financially immaterial information overstepping the SEC’s authority.

The Rule is currently preparing for oral argument in front of the Eighth Circuit based on briefs submitted by the prior administration.  Commissioner Uyeda has instructed the SEC litigation team to inform the Court that the SEC’s previously submitted briefs do not reflect the SEC’s

Read More »

February 18, 2025
Delisting

NASDAQ Finalizes Amendments To Accelerate Delisting Process

On January 17, 2025 the SEC approved Nasdaq’s rule change to accelerate the delisting process for companies that fail to regain compliance with the minimum bid price requirements following a second compliance period and for securities that have had a reverse stock split over the prior one-year period.  The final rule was passed as last submitted by Nasdaq, though in between the SEC required substantial additional analysis delaying the process on 3 occassions.

These rule changes follow other recent rule changes meant to reduce the number of ultra micro-cap companies trading on the national exchange and tighten up compliance for those that do meet the standards.  In October 2024, Nasdaq amended Rule 5810(c)(3)(A) to allow for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, the company falls below other listing standards, such as the minimum

Read More »

February 11, 2025
Form 8-K

NYSE Amends Listing Standards Related To Reverse Splits To Meet Minimum Price

On January 15, 2025, the SEC approved amendments to NYSE Listed Company Manual Rule 802.01C to allow for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, the company falls below other listing standards, such as the minimum number of round lot holders, or minimum number of shares in the publicly held float.  In October 2024, the SEC approved a similar rule change for Nasdaq – see HERE.

The SEC also approved amendments to Rule 802.01C such that: (i) if a listed company has effected a reverse stock split over the prior one-year period; or (ii) has effected one or more reverse stock splits over the prior two year period with a cumulative ratio of 200:1 or more, the company shall not be eligible for any compliance period and will face immediate suspension and delisting.

Background

Read More »

February 4, 2025
going public

Market Wrap Up – November and December 2024

As promised, I am going to provide regular market wrap-ups for the IPO market as we move forward with the next administration and chapter for our U.S. capital markets.  This edition covers November and December 2024.  For a review of the Market Wrap-Up for October 2024 see HERE.

Nine small cap ($30,000,000 and under) IPOs priced in November 2024 and 12 in December 2024 (compared to 19 in October; 12 in September; 8 in August; 8 in July; 3 in June; 5 in May; 12 in April; 6 in March; 6 in February; and 8 in January). Below is a chart of relevant deal information for the November and December IPOs. In October I only included deals up to $25,000,000 but raised the cap to $30,000,000.  Normally, I would include all deals under $50,000,000 in this category, but the deal sizes remain very low.  As deal sizes return to pre 2022 normal levels, I will continue to

Read More »

January 28, 2025
Filing A Form D

SEC Enforcement Actions For Late Form D Filings

In a first, the SEC settled three enforcement actions on December 20, 2024, for failing to timely file a Form D in connection with private offerings.  The three companies included one private fund and two private operating businesses.

The SEC enforcement actions were solely related to a violation of Rule 503 (as described below) and did not include any charges of fraud or other nefarious activity.  As a result of the settlements each of these companies are prohibited from relying on Regulation D in the future, unless specifically granted a waiver by the SEC.

In its release, the SEC stated that the SEC relies on Form D filings to assess the scope of the Regulation D market and whether the market is balancing the need for investor protection and the furtherance of capital formation, especially for smaller businesses.  The SEC also relies on Form D to monitor compliance with the requirements of Regulation D.  Likewise, state regulators rely on

Read More »

January 21, 2025

Categories

Recent News

SEC Further Expands Ability To File Confidential Registration Statements

March 25, 2025

The SEC’s Division of Corporation Finance has expanded the ability to file non-public confidential registration statements to include all registration statements.

In 2012, the JOBS Act created a path for emerging growth companies to file draft registration statements (DRS) on a confidential basis when completing an initial public offering.  In 2017 the Division of Corporation Finance expanded the DRS filing option to include all Section 12(b) Exchange Act registration statements (but not 12(g) registrations), all registration statements for initial public offerings, and follow on offerings completed within 12 months of an initial public offering, for all class of issuers.  See – HERE.

On March 3, 2025, the Division of Corporation Finance announced that it has further expanded the ability to utilize a DRS filing to include:

  • Initial registrations under the Exchange Act, including both Sections 12(b) and 12(g) including Forms 8-A, 10, 20-F and 40-F;
  • All Securities Act of 1933 (Securities Act) registration statements regardless of the amount of
Read More »
Read More...

Widespread “Dealer” Litigation Is Almost Over!

March 18, 2025

In August 2024, then SEC Commissioner Mark T. Uyeda made a public statement against the rampant enforcement proceedings against small cap investors claiming violations of the dealer registration requirements (see HERE).  Fast forward to today, now Chair of the SEC, Mr. Uyeda, is sticking by his contentions and finally, after eight long years of numerous enforcement proceedings, is directing the SEC to roll back its position.

What Happened

This week, the SEC enforcement division entered into two joint motions halting ongoing litigation claiming violations of the dealer registration rules.  The U.S. District Court for the District of Massachusetts entered an order in the case involving Auctus Fund Management staying the case while the parties wrap up an agreement to end the litigation.  Under the agreement Auctus will not seek attorney fees from the government or pursue a review of the enforcement action.

In the filing, Auctus said “[T]he parties have reached an agreement in principle to dismiss this

Read More »

Read More...

SEC Chair Uyeda Talks SEC Priorities

March 11, 2025

Just a few weeks after SEC Commissioner Hester Peirce gave some insight into the SEC’s priorities (see HERE), acting SEC Chair Mark Uyeda got more granular on what we can expect under his regime.  Commissioner Uyeda drilled down on particular SEC goals while giving a speech at the Florida Bar’s Annual Federal Securities Institute and M&A Conference.

The overarching goal of the SEC over the next few years will be to foster innovation, job creation and economic growth by maintaining cost effective regulations throughout a business’s life cycle.  To accomplish these goals, the SEC intends to “return normalcy” to the SEC by being cognizant of its legal authority, policy priorities and enforcement initiatives, all of which have gone awry over the last few years.

Commissioner Uyeda highlights some of the actions already taken to facilitate these goals, including rescinding Staff Legal Bulletin 14 related to shareholder proposals and proxy statements (for more on Staff Legal Bulletin 14 see

Read More »

Read More...

Commissioner Peirce Gives A Sneak Peak At SEC Priorities

March 4, 2025

At the end of January 2025, SEC Commissioner Hester Peirce, who finally is not on an island alone within the SEC top brass, gave a speech at the Northwestern Securities Law Institute giving some insight into what we can expect from the SEC under the new administration.

Commissioner Peirce has been vocal over the years about her disdain for bringing political and social issues into SEC reporting and compliance management for public companies, however now, working with like-minded executives, she has solid ideas for a path forward.  First and foremost, a public company should have the goal of maximizing value for its shareholders as a group.  Unfortunately, in today’s world, public companies are often forced to answer to activists, non-shareholder “stakeholders” and the like, forcing executives to utilize company resources to further these groups (or individual’s) favorite cause.  Commissioner Peirce notes that “[D]irectors and executive officers serve shareholders and society best by keeping the companies they guide focused on

Read More »

Read More...

Climate Disclosure Rules On The Way Out

February 18, 2025

On February 11, 2025 SEC Chairman Mark T. Uyeda issued a statement on the Enhancement and Standardization of Climate-Related Disclosure for Investors rule (“Climate Disclosure Rule”) adopted by the SEC on March 6, 2024 and later stayed as a result of ongoing litigation.

Commissioner Uyeda reiterated both he and Commissioner Peirce’s consistent view that the current disclosure rules are sufficient to cover any material climate related disclosures.  Furthermore, the Climate Disclosure Rule lacks statutory authority, SEC expertise and goes beyond the SEC’s arena of capital market regulation.

Commissioner Uyeda points out (and I whole-heartedly agree) that the Climate Disclosure Rule would require a large volume of financially immaterial information overstepping the SEC’s authority.

The Rule is currently preparing for oral argument in front of the Eighth Circuit based on briefs submitted by the prior administration.  Commissioner Uyeda has instructed the SEC litigation team to inform the Court that the SEC’s previously submitted briefs do not reflect the SEC’s

Read More »

Read More...

NASDAQ Finalizes Amendments To Accelerate Delisting Process

February 11, 2025

On January 17, 2025 the SEC approved Nasdaq’s rule change to accelerate the delisting process for companies that fail to regain compliance with the minimum bid price requirements following a second compliance period and for securities that have had a reverse stock split over the prior one-year period.  The final rule was passed as last submitted by Nasdaq, though in between the SEC required substantial additional analysis delaying the process on 3 occassions.

These rule changes follow other recent rule changes meant to reduce the number of ultra micro-cap companies trading on the national exchange and tighten up compliance for those that do meet the standards.  In October 2024, Nasdaq amended Rule 5810(c)(3)(A) to allow for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, the company falls below other listing standards, such as the minimum

Read More »

Read More...

NYSE Amends Listing Standards Related To Reverse Splits To Meet Minimum Price

February 4, 2025

On January 15, 2025, the SEC approved amendments to NYSE Listed Company Manual Rule 802.01C to allow for an accelerated delisting process where a listed company uses a reverse split to regain compliance with the bid price requirement for continued listing, but that as a result of the reverse split, the company falls below other listing standards, such as the minimum number of round lot holders, or minimum number of shares in the publicly held float.  In October 2024, the SEC approved a similar rule change for Nasdaq – see HERE.

The SEC also approved amendments to Rule 802.01C such that: (i) if a listed company has effected a reverse stock split over the prior one-year period; or (ii) has effected one or more reverse stock splits over the prior two year period with a cumulative ratio of 200:1 or more, the company shall not be eligible for any compliance period and will face immediate suspension and delisting.

Background

Read More »

Read More...

Market Wrap Up – November and December 2024

January 28, 2025

As promised, I am going to provide regular market wrap-ups for the IPO market as we move forward with the next administration and chapter for our U.S. capital markets.  This edition covers November and December 2024.  For a review of the Market Wrap-Up for October 2024 see HERE.

Nine small cap ($30,000,000 and under) IPOs priced in November 2024 and 12 in December 2024 (compared to 19 in October; 12 in September; 8 in August; 8 in July; 3 in June; 5 in May; 12 in April; 6 in March; 6 in February; and 8 in January). Below is a chart of relevant deal information for the November and December IPOs. In October I only included deals up to $25,000,000 but raised the cap to $30,000,000.  Normally, I would include all deals under $50,000,000 in this category, but the deal sizes remain very low.  As deal sizes return to pre 2022 normal levels, I will continue to

Read More »

Read More...

SEC Enforcement Actions For Late Form D Filings

January 21, 2025

In a first, the SEC settled three enforcement actions on December 20, 2024, for failing to timely file a Form D in connection with private offerings.  The three companies included one private fund and two private operating businesses.

The SEC enforcement actions were solely related to a violation of Rule 503 (as described below) and did not include any charges of fraud or other nefarious activity.  As a result of the settlements each of these companies are prohibited from relying on Regulation D in the future, unless specifically granted a waiver by the SEC.

In its release, the SEC stated that the SEC relies on Form D filings to assess the scope of the Regulation D market and whether the market is balancing the need for investor protection and the furtherance of capital formation, especially for smaller businesses.  The SEC also relies on Form D to monitor compliance with the requirements of Regulation D.  Likewise, state regulators rely on

Read More »

Read More...
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