NASAA Slams The JOBS Act, But Have The States Really Been Handcuffed?
NASAA isn’t in the business of firing off rockets but it did launch a missile yesterday targeted directly at the JOBS Act. In this press release, NASAA’s president, Jack E. Herstein, is quoted as saying: The JOBS bill the President signed today is based on faulty premises and will seriously hurt all investors by either eliminating or reducing transparency and investor protections. It will Read more...
Department Of Corporations Extends Emergency Rule
Yesterday, the California Corporations Commissioner Jan Owen gave notice that she will file on April 4, 2012 an emergency regulation extending the effectiveness of Rule 260.204.9 of Title 10 of the California Code of Regulations. Rule 260.204.9 currently exempts from registration investment advisers who are deemed “private advisers.” This emergency regulatory action will become effective on April 17, 2012, the same day as the expiration Read more...
A Good Meal, A Good Time And A Good Securities Offering?
A well-used sales technique is to offer prospective purchasers a free meal. In fact, the North American Securities Administrators Association has issued this alert to seniors about the dangers associated with a “free lunch”. I’ve sometimes wondered whether securities regulators should adopt a prohibition similar to the no swimming within one hour of eating rule – no sales within X days of Read more...
SEC Marks The Ides By Bringing Actions Involving Secondary Market For Private Company Shares
Nearly two years ago, I began writing about some of the issues related to secondary trading in private company shares. Yesterday (Prid. Id. Mart.), the Securities and Exchange Commission announced that it had taken action against several firms and individuals related to activities involving secondary trading of private company shares. In this Litigation Release, the SEC announced its filing of a civil Read more...
Punitive Bill Proposes Giant Step Backwards On Capital Formation
The California Corporate Securities Law of 1968 forbids the offer and sale in this state of any security in an issuer transaction unless the sale has been qualified or the security or transaction is exempt or not subject to qualification. Cal. Corp. Code Section 25110. This important principle is the same whether it is the initial sale of securities by Read more...
Enforcing Form D Filings – A Misguided State Policy
The American Bar Association’s Committee on State Regulation of Securities publishes The Blue Sky Bugle, a newsletter for lawyers who deal with the state regulation of securities. In a column for the December issue, Alan Parness of Cadwalader, Wickersham & Taft LLP wrote about the enforcement report issued last October by the North American Securities Administrators Association (aka NASAA). Alan Read more...
The Legacy Of The Commissioner Who Was Indicted
In an earlier post, I wrote about Edwin M. (“Mike”) Daugherty who served as California’s Commissioner of Corporations from 1922 until 1926 and then from 1931 to 1954. He was succeeded by interim Commissioner Clifford J. MacMillan. Then in March 1927, Governor Clement C. Young appointed Los Angeles City prosecutor Jack Friedlander to the post. Within two months of taking office, the Read more...
Securities Law Doppelgängers
Over the years, I’ve noted that a number of evil twins have walked the corporate securities law stage. Other People’s Money O.P.M. Leasing Services, Inc. was a large computer leasing company that crashed into bankruptcy on March 11, 1981. Eventually, O.P.M.’s two founders were each sentenced to prison for a financial fraud that reportedly involved over $200 million. One of Read more...
Felonious Filings
In October, I wrote about a warning from the Secretary of State regarding business theft. One way to steal a corporation’s identity is to make a false filing with the Secretary of State listing yourself as an officer. While this can be an initial step in an even bigger crime, such as grand theft, the filing itself is a crime (even Read more...
Commissioner Orders Crowdfunding Facilitator To Stop
In November, the U.S. House of Represantatives passed the Entrepreneur Access to Capital Act, HR 2930, to create a new exemption under the Securities Act of 1933 for “crowdfunding” meeting specified conditions. About the same time, the U.S. Senate weighed in with the Democratizing Access to Capital Act of 2011, S 1791. According to the bill’s author, Massachusetts Senator Scott Brown, S 1791 Read more...
