Securities Regulator “Surprised and Offended” By SEC’s Regulation A+ Proposal

Section 401 of the JOBS Act directs the Securities and Exchange Commission to adopt rules exempting offerings of up to $50 million of securities annually from the registration requirements of the Securities Act of 1933, as amended.  Last December the SEC proposed rule amendments to Regulation A to implement this mandate.  This is sometimes referred

Does The SEC’s Regulation A Proposal Defy Congress’ Clear Intent?

This week’s announcement by the Securities and Exchange Commission that it is proposing amendments to update and expand Regulation A has attracted quite a bit of attention.  David Lynn writing in Broc’s Blog took special note of the proposed preemption of state blue sky laws.  As expected, additional preemption did not sit well with the

Questions About Third-Party Confirmations Of Accredited Investor Status

Countless memoranda and alerts have been issued about the SEC’s adoption of rule amendments eliminating the prohibition against general solicitation and general advertising in Rule 506 and Rule 144A offerings.  Congress ordered the SEC to adopt these amendments as part of the Jumpstart Our Business Startups Act, or JOBS Act.   Issuers that wish to engage in general solicitation take “reasonable

SEC’s Bad Actor Rules Roil Opinion Practice

The SEC’s bad actor rules are causing a great deal of consternation amongst lawyers who are being asked to give opinions that the offer and sale of securities do not require registration under the Securities Act of 1933.  Historically, these opinions were usually based (albeit not always explicitly) on the non-exclusive safe harbor of Rule 506.  The addition of bad

Department Of Corporations Issues Crowd Funding Bulletin

Last week, the Department of Corporations issued this bulletin which it styled as a “Crowdfunding Update”.  The Bulletin makes several important points. Until the Securities and Exchange Commission adopts regulations, there is no federal crowd funding exemption.  It should be noted that Congress mandated that the SEC adopt these regulations by December 31, 2012.  As

SEC Faces A Swarm Of Legal Issues In Considering The Investor Advisory Committee’s Recommendations Concerning General Solicitation

The SEC’s Investor Advisory Committee held another meeting last week with Elisse B. Walter making her first public appearance as SEC Chairman.  She and Commissioner Luis A. Aguilar had many kind words for the Committee’s recommendations with respect to lifting the ban on general solicitations in Rule 506 offerings.  The insouciance of their remarks, however,

DOC Warns Financial Services Licensees And Can A Theory Be A Tautology?

Last April, the Consumer Financial Protection Bureau issued this Bulletin cautioning supervised banks and certain non-depository financial services companies that they must have “an effective process for managing the risks of service provider relationships”.  Like many regulatory requirements, the Bulletin has given birth to both a new industry and unintended consequences.  The new industry is third-party risk management.  This is a

Can The SEC Eliminate The Prohibition On General Solicitation Retroactively?

In Section 201(a)(1) of the Jumpstart Our Business Startups (JOBS) Act, Congress ordered the Securities and Exchange Commission to amend Regulation D to permit general solicitation or general advertising in offerings made under Rule 506, provided that all purchasers of the securities are accredited investors.  See Chowing Down On The JOBS Act And Ralston Purina. 

Will The Pilot Know When A Corporation Has “Crost the Bar”?

Section 12(g)(1) of the Securities Exchange Act previously required issuers with total assets of $10 million and a class of equity securities held of record by 500 or more persons to register the security with the Securities and Exchange Commission.  Registration was required within 120 days after the last day of the issuer’s first fiscal year ended