Website Heading

CALIFORNIA CORPORATE & SECURITIES LAW

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…

Share on:

Will Issuers Add Rule 506(d) Bad Acts To The Definition Of “Cause”?

The SEC’s new bad actor rule, Rule 506(d), may cause some issuers to consider expanding the definition of “cause” in their employment agreements with executive officers. Because executive employment agreements typically reduce severance payments significantly in the case of “for cause” terminations, the definition of “cause” is often hotly negotiated. While “cause” definitions often include…

Share on:

If One Bad Actor SpoilsThe Whole Barrel, What’s An Issuer To Do?

The Jackson Five had it wrong.  Under the SEC’s recently adopted Rule 506(d), one bad actor can indeed spoil the whole bunch.  To some extent issuers can exercise some control over who becomes or remains a covered persons.  However, an issuer may not be able to rid itself of all bad actors.  For example, the SEC has…

Share on:

Involuntary Stock Exchange Listings, Affiliated Issuers And Produce

Involuntary Listings A few days ago, Broc Romanek wrote that a number of companies have received letters from the St. Petersburg (Russia) Stock Exchange stating that the exchange is in the process of unilaterally listing the company’s securities.  This reminded me of my own blog post discussing whether a secondary options market could be created in an issuer’s…

Share on:

This Picture Is Worth 471 Words (More or Less)

Monday is the big day for the SEC’s “Bad Actor” and “General Solicitation” rule amendments.   I’ve previously observed that many are likely to find the Bad Actor amendments to be bad rules when it comes to compliance.  Today’s blog is devoted to just one interpretational problem with the Bad Actor amendments. Under the SEC’s rule, the disqualification…

Share on:

Hedge Fund Advertising – What’s The Wall Street Journal Talking About?

Last week, the Wall Street Journal published an article stating: “The JOBS Act, signed by President Obama on April 5, lifted a decades-old restriction on how hedge funds can go after new investors, clearing the way for managers to speak more publicly about their strategies and performance and even to advertise.” Later, a WSJ blog asserted:…

Share on: