Securities Law

SEC Withdraws Statement On Broker Dealer Custody Of Digital Asset Securities

On May 15, 2025, the SEC Division of Trading and Markets and Office and FINRA’s Office of General Counsel withdrew their joint statement on broker dealer custody of digital asset securities. The original joint statement had been issued on July 8, 2019 (see HERE). This original statement has oft been thought of as the reason that broker dealers have not (could not) adopt any broad ranging policies or procedures related to digital assets.

The withdrawal of the joint statement, together with the slew of other recent activity from the SEC related to digital assets, (see HERE for example) is an important step towards more widespread adoption of digital asset trading, allowing retail investors to aggregate their investments with their trusted broker dealer advisors.

Refresher On Original Joint Statement/Concerns

Broker-dealers that hold funds and securities must comply with Exchange Act Rule 15c3-3 (the “Customer Protection Rule”), which generally requires the broker to maintain physical possession or control over

May 27, 2025

New Guidance On Rule 14a-8 Shareholder Proposals And No Action Letter Process

On February 12, 2025, shortly after the inauguration, the SEC Division of Corporation Finance (“Corp Fin”) issued Staff Legal Bulletin 14M (“SLB 14M”) rescinding SLB 14L which had in turn rescinded prior SLBs 14I, 14J and 14K. As an aside, SLB 14L was issued under then new Chair Gary Gensler in 2021 following Biden’s election, and the prior three SLB’s had been issued under then Chair Jay Clayton, following President Trump’s first election. For more on SLB 14L see HERE.

New SLB 14M provides more of a middle ground to the prior 14L which had been designed to make it easier for environmental, social and governance (ESG) advocates to include their various proposals in company proxy materials.

Background – Rule 14a-8

The regulation of corporate law rests primarily within the power and authority of the states. However, for public companies, the federal government imposes various corporate law mandates including those related to matters of corporate governance. While state law

May 20, 2025

Delaware Reworks General Corporation Law

On March 25, 2025, Delaware enacted sweeping changes to the Delaware General Corporation Law (“DGCL”) to provide certainty to key areas of Delaware corporate law. The changes are expected to reduce the tide of redomestications to other states and reduce litigation risks for corporations and their boards of directors. The key changes include new safe harbor protections for one or more directors, officers, or controlling shareholders/groups, from liability where they may not be independent in a transaction and changes to stockholders’ rights to inspect books and records.

Related Party Liability Protections

Section 144 of the DGCL relates to interested directors, officers and controlling stockholder transactions. In essence, Section 144 provides a safe harbor against liability claims for transactions between a corporation and its officers, directors, or controlling stockholders where conflicts, such as a financial interest, exist. Section 144 prevents a transaction from being declared void or voidable solely due to the conflict of interest, as long as certain conditions

May 13, 2025

SEC Publishes CD&I On Mergers And Acquisitions, Form S-4 And Tender Offers

On March 6, 2025, the SEC published several updates to its compliance and disclosure interpretations (“CD&I”) related to mergers and acquisitions, Form S-4 and tender offers.

Rule 145(a)/Form S-4

Revised CD&Is 239.13 and 225.10 address the circumstances upon which seeking commitments for favorable votes, in advance of a merger/acquisition transaction, would be deemed an “offer or sale” of securities under Section 5, requiring either registration or an exemption from registration by the soliciting party.

Acquiring companies often seek management and principal shareholder commitments to vote in favor of a transaction as part of the negotiations associated with a merger/acquisition prior to soliciting such favorable votes from the shareholders at large such as by filing a Form S-4. The SEC recognizes that by executing these agreements, those management and shareholders have made investment decisions, prior to the transaction being presented to non-affiliate shareholders, in violation of Rule 145(a). However, the SEC also recognizes the legitimate reasons an acquiring company

May 6, 2025

SEC Publishes CD&I On Form S-3, Regulation S-K, Form 20-F, And Section 13

On March 20, 2025, the SEC published several updates to its compliance and disclosure interpretations (“CD&I”) related to Forms S-3 and 20-F, and Regulation S-K. The new CD&I importantly allow all issuers, not just well-known seasoned issuers (“WKSIs”) to go effective on Form S-3 registration statements between the filing of a Form 10-K and the filing of the proxy statement containing Form 10-K Part III disclosures.

Earlier, on February 11, 2025, the SEC published one revised and one new CD&I related to Section 13 filings on Schedules 13D and 13G.

Form S-3/Securities Act Rules

Revised CD&Is 114.05 and 198.05 confirm that a Form S-3 ASR and a non-automatically effective Form S-3 may be filed and declared effective after a company files its Form 10-K but prior to filing its Part III information in either a proxy statement or amended Form 10-K. However, the SEC notes that companies are responsible for ensuring that any prospectus used in connection with

April 29, 2025

Market Wrap-Up – First Quarter 2025

This edition of my market recap covers the first quarter of 2025. For a review of November and December 2024 see HERE and for October 2024 see HERE.

Forty-two small cap ($30,000,000 and under) IPOs priced in the first quarter of 2025 (13 in January, 15 in February and 14 in March) – a large uptick from 2024. Below is a chart of relevant deal information for the first quarter IPOs.

Exchange	Offer Amount	Domestic/Foreign Issuer	Banker(s)

Nasdaq Capital	$8,000,000	Foreign	AC Sunshine Securities, LLC
Nasdaq Capital	$6,000,000	Foreign	Kingswood Capital Partners, LLC
Nasdaq Capital	$5,000,000	Foreign	Craft Capital Management, LLC and Boustead Securities, LLC
Nasdaq Capital	$7,000,000	Foreign	Benjamin Securities, Inc. and Prime Number Capital, LLC
Nasdaq Capital	$8,400,000	Foreign	R.F. Lafferty & Co., Inc.
Nasdaq Capital	$5,614,740	Foreign	Bancroft Capital, LLC and Eddid Securities USA
Nasdaq Capital	$7,000,000	Foreign	Benjamin Securities, Inc. and Prime Number Capital, LLC
NYSE MKT	$10,000,000	Domestic	Alliance Global Partners
Nasdaq Capital

April 22, 2025

SEC Publishes CD&I On Exempt Offerings; Accredited Investor Guidance – Part 2

On March 12, 2025, the SEC published several updates to its compliance and disclosure interpretations (“CD&I”) related to exempt offerings. Two of the new C&DI clarify acceptable processes for verifying accredited investor status in a Rule 506(c) offering. On the same day the SEC issued no-action relief providing further detail on affirming accredited investor status. Part 1 of this blog series discussed the two rule 506(c) C&DI and no action letter – see HERE. This Part 2 will continue a review of the remaining substantive CD&I.

Confidential Filing of Form 1-A

Modified CD&I question 182.01 confirms that when a confidentially filed Form 1-A is made public by choosing “Disseminate Draft Offering Statement” in the EDGAR database, it will have satisfied the requirements to make prior confidential information public. The prior CD&I on this topic required an issuer to file, as an exhibit to its public Form 1-A, any related non-public correspondence. The SEC will now undertake to make

April 15, 2025

SEC Publishes CD&I On Exempt Offerings; Accredited Investor Guidance – Part 1

On March 12, 2025, the SEC published twenty-four new or revised compliance and disclosure interpretations (“CD&I”) related to exempt offerings. Two of the new C&DI clarify acceptable processes for verifying accredited investor status in a Rule 506(c) offering. On the same day the SEC issued no-action relief providing further detail on affirming accredited investor status. The new guidance should make the use of Rule 506(c) offerings much easier and more palatable. This blog will address the C&DI directed to Rule 506(c) and the no-action letter, and Part 2 will unpack the rest. I’ve included a refresher on Rule 506(c) at the end of this blog.

New C&DI

Question 256.35 asks “[I]f an issuer does not satisfy any of the verification safe harbors in Rule 506(c)(2)(ii), are there other methods an issuer can use that will satisfy the requirement to take reasonable steps to verify accredited investor status?”

Answering in the affirmative, the SEC confirms that the verification methods listed in

April 8, 2025

Crypto Industry Gets A Second Chance

The last time I substantively wrote about cryptocurrencies and the crypto industry was in April 2023, when the SEC was firmly hostile against the industry and a slew of negative events (FTX collapse, etc..) pretty well eliminated crypto as an active element in the capital markets (see HERE). That has changed!

Here is a recap of the newly regenerated crypto capital markets initiatives:

Digital Asset Executive Order

On January 23, 2025, President Trump signed an executive order entitled “Strengthening American Leadership in Digital Financial Technology” supporting the growth of the digital asset industry in the U.S. The order specifically:

Protects and promotes the ability of individual citizens and private-sector entities to access and use open blockchain including the ability to develop and deploy software to participate in mining and validating crypto assets;
Allow individual citizens and private-sector entities to self-custody digital assets;
Promotes and protects the U.S. dollar through the development and growth of dollar backed stablecoins;

April 1, 2025

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

March 25, 2025

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Securities Law

SEC Withdraws Statement On Broker Dealer Custody Of Digital Asset Securities

Delaware Reworks General Corporation Law

SEC Publishes CD&I On Mergers And Acquisitions, Form S-4 And Tender Offers

SEC Publishes CD&I On Form S-3, Regulation S-K, Form 20-F, And Section 13

Market Wrap-Up – First Quarter 2025

SEC Publishes CD&I On Exempt Offerings; Accredited Investor Guidance – Part 2

SEC Publishes CD&I On Exempt Offerings; Accredited Investor Guidance – Part 1

Crypto Industry Gets A Second Chance

SEC Further Expands Ability To File Confidential Registration Statements

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