Retweets, Social Media & Being Public – Going Public Lawyers

Social Media is OK – Securities Lawyer 101

Posted by Brenda Hamilton Securities Lawyer

It has become almost routine for public companies to use social media to interact with their shareholders, and customers. The Securities and Exchange Commission (the “SEC”) has provided guidance in compliance and disclosure interpretations addressing the use of Twitter, Facebook, and other forms of social media. It is important than public companies and companies engaged in going public transactions familiarize themselves with the SEC’s rules concerning social media.

Active Hyperlinks & Disclosure Obligations

The SEC has stated that the use of social media and hyperlinks using social media platforms, such as Twitter, that limit the number of characters or amount of text that can be included in the communication, effectively making it impossible for firms to include the required legends and other disclosures. Read More

Going Public Strategies – By The Going Public Attorneys

Going Public Attorney

Posted by Brenda Hamilton, Securities & Going Public Attorney

Going Public can involve a variety of structures depending upon each company’s specific needs.  Companies seeking to Go Public can involve an Initial Public Offering (IPO), Direct Public Offering (DPO), Form 10 transaction, Slow Public Offering and/or a Reverse Merger.  It is critical that companies seeking public company status select the right going public attorneys for their transaction.  A skilled going public attorney can assist issuers seeking to “Go Public” without an underwriter or reverse merger by using a Direct Public Offering and obtaining their own stock ticker symbol.  This holds true for company seeking to Go Public on the NYSE, AMEX, NASDAQ, OTC Markets OTCQB, OTCQX or OTC Pink Sheets.
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House Considers M&A Brokers – By: Brenda Hamilton Securities Lawyer

Securities Lawyer 101 l Brenda Hamilton Attorney

Posted by Brenda Hamilton, Securities Lawyer

On February 3, 2015, HR 686, The Small Business Mergers, Acquisitions, Sales & Brokerage Simplification Act, was introduced in the U.S. House of Representatives. HR686 mirrors HR2274. which was passed unanimously in the U.S. House of Representatives last year, although it was never acted upon in the U.S. Senate.  HR 686 exempts “Merger and Acquisition Brokers” or “M & A brokers” from registration under the Securities Exchange Act of 1934, (the “Exchange Act”) if he or she is engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an “Eligible Privately Held Company”. Read More

Short Swing Profits Q & A By: Brenda Hamilton Securities Lawyer


The “Short Swing Profit” rules were created to prevent insiders, who have greater access to material company information, from taking advantage of information for the purpose of making short-term profits from trading an issuer’s securities.  This Securities Lawyer 101 Q & A addresses the most common questions we receive about short swing profits. Read More

Accredited Crowdfunding Q & A – Going Public Lawyers

Accredited Crowdfunding l Securities Lawyer 101

Posted By Brenda Hamilton, Securities Lawyer

Private placement offerings under Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”) are a cost effective and relatively quick way for private companies to raise capital before, during and after a going public transaction.  The JOBS Act created Rule 506 and created a new exemption known as Accredited Crowdfunding.  Rule 506(c) fundamentally changed the way unregistered offerings are conducted.  While the rule imposes stringent requirements, these requirements are manageable for issuers putting effective compliance strategies into place.  Rule 506 offerings are frequently used to raise capital in connection with going public transactions that involve filing a registration statement on Form S-1. Accredited Crowdfunding under Rule 506 (c) has become a popular means of obtaining seed shareholders in going public transactions. Read More

Caledonian Securities & Caledonian Bank Seized by Cayman Officials

Securities Lawyer 101 l Brenda Hamilton

Posted by Brenda Hamilton, Securities Lawyer

Following an action by the Securities and Exchange Commission (the “SEC”) last week, and an asset freeze order, the Cayman Islands Monetary Authority has taken control of Caledonian Bank and Caledonian Securities.  According to charges by the SEC on February 7, 2014, Caledonian, Clear Water Securities, Legacy Global Markets S.A., and Verdmont Capital S.A. functioned as affiliates, unregistered brokers and dealers, and underwriters, in connection with four penny stock issuers: Swingplane Ventures (SWVI), Goff Corp. (GOFF), Nostra Energy (NORX) and Xumanii Inc. (now Imerjn Inc., IMJN).

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DTC Eligibility Q & A – Going Public Attorneys

Securities Lawyer 101 l DTC Eligibility

Q. What is The Depository Trust Company (“DTC”)?

A. DTC is the only stock depository in the United States.

Q. How do public companies obtain DTC eligibility?

A. Issuers must satisfy specific criteria to receive initial DTC eligibility, and to remain DTC eligible.  Even after those securities become eligible, DTC may limit or terminate its services. Read More

Does FINRA Approve Going Public Transactions? Going Public Attorneys

Going Public Attorneys

By The Going Public Attorneys – The Financial Institution Regulatory Authority (FINRA) plays an important role in going public transactions.  While filing a registration statement on Form S-1 can make a company reporting with the Securities and Exchange Commission, it will not cause the company’s stock to trade and it will not result in a ticker symbol.  Only FINRA can assign a stock ticker symbol. FINRA is a self-regulatory organization (“SRO”) created in 2007.  FINRA is the largest non-governmental regulator of broker-dealers in the U.S.  FINRA oversees nearly several thousand brokerage firms, hundreds of thousands of their branch offices as well as their registered securities representatives. Read More

Cry Me A River – DTC Chills & Global Locks

DTC Chill Global Lock

Securities Lawyer 101 Blog

The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities.  DTCC’s subsidiary, the Depository Trust Company (“DTC”), was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions by allowing securities transactions to be conducted electronically.  Without DTC eligibility, it is almost impossible for a company to establish an active trading market for its shares.  To have DTC eligibility, a company must satisfy the criteria set by DTCC to be settled through DTC.  In addition, a company must satisfy the criteria established by DTC to remain DTC eligible.  If they fail to do so, DTC will limit its services and issue a DTC Chill or terminate its services and issue a global lock. Read More

Penny Stock Lawyers, Auditors & Nominees Charged by SEC

Gatekeepers - Securities Lawyer 101

On January 15, 2015, the Securities and Exchange Commission (the “SEC”) announced charges against penny stock lawyers, auditors, and others allegedly involved in a microcap scheme involving bogus Form S-1 registration statements filed with the SEC.  According to the SEC, John Briner, a Canadian attorney and stock promoter caused the companies to file 20 bogus Form S-1 registration statements with phony cookie cutter business plans.  According to the SEC, because John Briner had been suspended from practicing law before the Commission, he recruited clients and associates to become nominees while he secretly controlled the companies from behind the scenes.  The registration statements falsely stated that each CEO was solely running the company when in fact Briner was making all material decisions. Read More

When is a Form S-1 Confidential?

Securities Lawyer 101 Blog

The Jumpstart Our Business Startups Act (the “JOBS Act”) allows an “emerging growth company” to submit a draft of its registration statement and exhibits to the Securities and Exchange Commission (the “SEC”) on a confidential basis.  This is particularly useful to companies in going public transactions who are unfamiliar with the SEC registration statement process.

This blog posts addresses the common questions we receive about the confidential submission process for Form S-1 registration statements.

Q. When does an emerging growth company have to file its Form S-1 registration statement if it wants the submission to be confidential? Read More

SEC Suspends Modern PVC (MPVC) – Securities Lawyer 101

On February 6, 2015, the U.S. Securities and Exchange Commission (the “SEC”) announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading of the securities of Med Pro Venture Capital, Inc., f/k/a Modern PVC, Inc. (“MPVC”), at 9:30 a.m. EST on February 6, 2015, and terminating at 11:59 p.m. EDT on February 20, 2015. Read More

SEC Charges Three in Penny Stock Scam

Securities Fraud

Last week, the Securities and Exchange Commission (the “SEC”) charged International Capital Group (“ICG”) and certain of its founders and executives in connection with the sale of more than nine billion shares of penny stocks issued through purported stock-based loans, block trades, and other transactions.  As in most dilution schemes, the shares were not registered with the SEC.  The defendants were charged with violations of the SEC’s broker-dealer registration requirements. Read More

SEC Charges Oppenheimer For Penny Stock Sales

SEC Enforcement

Last week, the Securities and Exchange Commission (“SEC”) announced charges against Oppenheimer & Co. for violations of federal securities laws for improperly selling penny stocks in unregistered offerings on behalf of customers. Oppenheimer agreed to admit wrongdoing and pay $10 million to settle the SEC’s charges.  Oppenheimer will pay an additional $10 million to settle a parallel action by the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). Read More

What Is Periodic Reporting? Going Public Lawyers

Periodic Reporting
Once the staff of the Securities and Exchange Commission (“SEC”) declares a company’s registration statement on Form S-1 effective under the Securities Act of 1933, as amended (the “1933 Act”), the registration statement is in force and the company may offer and sell the registered securities described therein.

At that time, the company filing the registration statement will become subject to the SEC’s periodic reporting requirements.  These requirements stipulate that the company must file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K on an ongoing basis.  The company’s CEO and CFO must certify the financial and certain other information contained these reports.  If an issuer is deemed a “smaller reporting company” or an “emerging growth company,” it will qualify for less onerous disclosure requirements. Read More

SEC Issues Investor Alert on Cybersecurity

Securities Fraud

On February 3, 2015, the Securities and Exchange Commission (the “SEC”) addressed cybersecurity at brokerage and advisory firms and provided suggestions to investors on ways to protect their online investment accounts. Read More

Can I Afford To Go Public on the OTCQB? – Going Public Lawyer

Consent of Auditor l Securities Lawyer 101

Going public requirements vary for companies seeking to go public on the OTC Markets OTC Pink and OTCQB marketplace.  The biggest difference is that most of the time (but not always) companies who go public on the OTCQB provide more transparency to investors than OTC Pink Sheet companies because they file reports with the Securities and Exchange Commission (the “SEC”).

As of May 2014, the OTC Markets imposed new requirements for OTCQB companies who must now pay initial and continuous listing fees and maintain a bid price above $0.01 per share.  Not every company can afford the expense of being an SEC reporting company.  To be quoted on OTCQB, the company must be reporting with the SEC and pay an initial and annual listing fees to the OTC Markets. Reporting Companies not paying the listing fee to the OTC Markets will be quoted with an OTC Pink tier.  Thus, OTC Pink companies are both reporting and non-reporting issuers. Read More

Roadmap For a Successful Direct Public Offering

Accredited Investor

Preparing for a direct public offering takes both a commitment of time and money.  Unlike an initial public offering (“IPO”), a direct public offering does not involve an underwriter.  While it often, it takes a year or longer to plan for and complete an IPO, a direct public offering can be completed in as little as 90 days.

Money and time are not the only things required for a successful direct public offering.  Having the right going public attorney is critical to the direct public offering process.  Some companies begin planning for their direct public offering months before the process begins.  During this time, the company prepares for the audit process, develops its plan of operations and obtains its shareholder base. Read More

Medbox & The License to Swindle

Down the Rabbit Hole We Go

We were recently asked to review a penny stock company called Medbox Inc. (MDBX).  The Medbox story has been of considerable interest over the past two years, for the most part because of its colorful founder, P. Vincent Mehdizadeh, its involvement in the nascent medical marijuana industry, and its unusually high stock price.  But for those willing to dig into the past, it also illustrates why receivership and custodianship shells are the greatest enforcement failure impacting the microcap markets in the last decade.

Medbox poses important questions about why the government has generously handed out “licenses to swindle” to a handful of criminals who have hijacked the identity of hundreds of public companies and/or their ticker symbols using fraudulent receivership actions.  The criminals include attorneys and transfer agents.  According to the Securities & Exchange Commission (“SEC”), lawyers and transfer agents are the gatekeepers of the public markets so why haven’t these hijackers been charged? Medbox is just one of many examples of why the SEC has failed in its highly publicized “Operation Shell Expel”.  The bottom line is despite its impressive stats, the most egregious criminals swindling investors in microcap companies have yet to be prosecuted. Regulators should be taking action against the criminals who put hijacked tickers like MDBX into the market place. Read More

How Does A Foreign Issuer Go Public? Going Public Attorneys

Going Public Foreign Companies - EB-5

Foreign issuers seeking to go public have several options for their transactions.  Foreign issuers seeking to go public in the U.S. may complete an initial public offering or direct public offering by registering an offering of securities with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”).  Under SEC rules, foreign issuers that qualify as “foreign private issuers” have the option but not the obligation to use rules available to foreign issuers going public in the U.S. Read More