(800) 341-2684

Call Toll Free

Contact us

Online Inquiries 24/7

Laura Anthony Esq

MAKE VALUED ALLIANCES

Rule 415

Commissioner Uyeda’s Statement On Dealer Litigation

On August 19, 2024, SEC Commissioner Mark T. Uyeda published a statement regarding one of the numerous defendants in SEC initiated enforcement proceedings claiming unlicensed dealer activity.  The statement resonates with the sentiments of most of my colleagues, peers and clients.

Background

In November 2017 the SEC shocked the industry when it filed an action against Microcap Equity Group, LLC and its principal alleging that its investing activity required licensing as a dealer under Section 15(a) of the Exchange Act.  Since that time, the SEC has filed numerous additional cases with the sole allegation being that the investor acted as an unregistered dealer.  In each case, the investor entity purchased convertible promissory notes from micro-cap OTC Markets issuers (or other existing note holders), which, after the applicable Rule 144 holding period, were converted into shares of common stock and sold on the open market.  As the securities were generally low priced, the conversions resulted in large quantities of additional

Who Is An Affiliate And Why Does It Matter – Primary VS Secondary Offering

The concept of affiliation resonates throughout the federal securities laws, including pertaining to both the Securities Act and Exchange Act rules, regulations and forms and Nasdaq and NYSE compliance.  In this multipart series of blogs, I will unpack what the term “affiliate” means and its implications.  This first blog in the series began with an analysis of the Securities Act definition of “affiliate” and the implications under Rule 144, Section 4(a)(7) and Form S-3 eligibility (see HERE).  In this Part 2 of the series, I am delving into the meaty topic of a primary vs. secondary offering, which itself hinges on whether the offeror is an affiliate.

Secondary/Resale Offerings vs. Primary Offerings

A secondary offering is an offering made by or on behalf of bona fide selling shareholders and not by or on behalf of the registrant company.  A secondary offering can only occur after a company is public.  That is, even if a company goes public

Who Is An Affiliate And Why Does It Matter – Part 1

WHO IS AN “AFFILIATE” AND WHY DOES IT MATTER? PART 1

The concept of affiliation resonates throughout the federal securities laws, including pertaining to both the Securities Act and Exchange Act rules, regulations and forms and Nasdaq and NYSE compliance.  In this multipart series of blogs, I will unpack what the term “affiliate” means and its implications.  This first blog in the series begins with the Securities Act definition of an “affiliate” and the implications under Rule 144, Section 4(a)(7) and Form S-3 eligibility.  In Part 2 of the series, I will delve into the meaty topic of a primary vs. secondary offering, which itself hinges on whether the offeror is an affiliate.

Securities Act Definition of Affiliate

The Securities Act provides a statutory definition of an “affiliate” to begin what is a facts and circumstances analysis (as is common in the federal securities laws).  Rule 405 of the Securities Act defines an “affiliate” as “[A]n affiliate of, or

SEC Publishes FAQ On COVID-19 Effect On S-3 Registration Statements

The SEC has issued FAQ on Covid-19 issues, including the impact on S-3 shelf registration statements.  The SEC issued 4 questions and answers consisting of one question related to disclosure and three questions related to S-3 shelf registrations.

SEC FAQ

Disclosure

Confirming prior guidance, the SEC FAQ sets forth the required disclosures in the Form 8-K or 6-K filed by a company to take advantage of a Covid-19 extension for the filing of periodic reports.  In particular, in the Form 8-K or Form 6-K, the company must disclose (i) that it is relying on the COVID-19 Order (for more information on the Order, see HERE); (ii) a brief description of the reasons why the company could not file the subject report, schedule or form on a timely basis; (iii) the estimated date by which the report, schedule or form is expected to be filed; and (iv) a company-specific risk factor or factors explaining the impact, if material, of

Categories

Contact Author

Laura Anthony Esq

Have a Question for Laura Anthony?