The SEC Issues Trading Suspension of Southridge Enterprises

SEC Trading Suspension l Securities Lawyer 101
Securities Lawyer 101 Blog

On Dec 28, 2012, the Securities and Exchange Commission (“SEC”) announced a trading suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of the securities of Southridge Enterprises, Inc. (SRGE), a Nevada corporation (“Southridge”).

The SEC’s  Order of Suspension of informs the public that, “It appears … that there is a lack of current and accurate information concerning the securities of Southridge because of questions regarding the accuracy of statements made by Southridge. Read More

The Securities Act of 1933

SEC Investigation
Securities Lawyer 101 Blog

The Securities Exchange Act of 1933, as amended (the “1933 Act”) is often referred to as the “truth in securities” law. The 1933 Act requires disclosure of financial and other material information about securities that are being offered for sale to the public. Read More

Securities Registration and the Emerging Growth Company

Emerging Growth Company AttorneyIf a private company undertakes a public offering, the Securities Act of 1933, as amended (the “1933 Act”) requires the private company to file a registration statement with the SEC before it may offer its securities for sale to the public. The registered offering can be a direct public offering for a company that chooses to go public directly or an initial public offering (“IPO”) for  company conducting an underwritten public offering. The company may not sell the securities covered by the registration statement until the SEC staff declares the registration statement “effective.” The disclosures required by the 1933 Act vary depending upon if the issuer qualifies as an emerging growth company and whether the company previously engaged in a reverse merger with a public shell company. Read More

How Do I Go Public to Raise Capital?

Securities Lawyer 101 - Form S-1 Registration
Securities Lawyer 101 Blog

A private or public company can raise capital in a variety of ways. Traditional sources of capital for companies include loans from financial institutions such as a bank, or from friends and family as well as receivable financing. Companies can also raise capital in going public transactions by selling their securities prior to filing an SEC registration. Read More

JOBS Act l Research Analysts and Underwriters

Going Public Lawyer101

Securities Lawyer 101 Blog

On September 28, 2012, the Financial Industry Regulatory Authority, Inc. (“FINRA”) proposed rule changes to the Securities and Exchange Commission (the “SEC”), for NASD Rule 2711, which regulates the activities of research analysts. The proposals were made pursuant to the requirements of the Jumpstart Our Business Startups Act (the “JOBS Act”).

JOBS Act – Research Analyst Communications Read More

Securities Lawyers Gone Wild l Carl Duncan

 Carl Duncan Attorney
Securities Lawyer 101 Blog

On September 27, 2012, the SEC charged 8000, Inc. and Carl Duncan, Esq. for his role in a scheme to manipulate 8000, Inc.’s stock price. The SEC complaint alleges that certain defendants misrepresented 8000, Inc.’s financial condition to investors while simultaneously selling, or facilitating the sale of, the company’s securities in violation of the antifraud and securities registration provisions of the federal securities laws. Read More

Removing the Advertising Ban in Rule 506 Offerings

Removing the Advertising Ban in Rule 506 Offerings
Securities Lawyer 101 Blog

Rule 506(c) of Regulation D, enacted under the Jumpstart Our Business Startups Act (the “JOBS Act”) is intended to help smaller and emerging growth companies raise capital in the U.S. capital markets. The JOBS Act adds new sections to the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934 (the “1934 Act”).  The JOBS Act’s stated purpose is to assist small companies in raising capital. Less stringent requirements will encourage smaller companies seeking to raise capital to go public directly, without involving an underwriter, as traditional IPOs do.

In furtherance of this purpose, Section 201 of the JOBS Act requires the SEC to change regulations applicable to Rule 506 Attorneys of Regulation D of the Securities Act. Most notably, the JOBS Act removes the prohibition on general solicitation and advertisement by issuers that rely on Rule 506. Rule 506 is an exemption frequently used by private companies that go public directly on OTC Markets, and by hedge funds, private equity funds and venture capital funds. Read More

How Did the JOBS Act Change Mandatory Exchange Act Registration?

JOBS Act Attorney

Securities Lawyer 101 Blog

On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the “JOBS Act”), which is intended to help smaller and emerging growth companies access the U.S. capital markets. The JOBS Act amends, and adds new sections to, the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934 (the “1934 Act”), as well as the Sarbanes-Oxley Act of 2002. Section 12(g) of the Exchange Act requires companies with more than $10 million in assets whose equity securities are held by more than 500 shareholders of record to file periodic reports with the Securities and Exchange Commission (the “SEC”). Read More

OTC Markets OTC Pink Disclosure Obligations

Securities Lawyer 101 - OTC Pink

Securities Lawyer 101 Blog

 OTC Markets Group operates the world’s largest electronic inter-dealer quotation system. Broker-dealers use it to trade unlisted securities. OTC Markets assigns issuers to one of three tiers based upon the level of disclosure provided.

The OTC Pink is used to categorize issuers who do not file reports with the Securities and Exchange Commission (“SEC”).

The OTC Pink tier comprises three sub-categories: OTC Pink Current Information, Pink Limited Information, and Pink No Information.

Secondary trading of the securities of OTC Pink Sheet issuers is facilitated only between broker-dealers. They use OTC Link, OTC Markets’ electronic trading platform.

Current SEC reporting companies and non-U.S. companies that are listed on a qualified foreign stock exchange automatically qualify for the OTC Pink Sheets Current Information tier. Issuers not reporting with the SEC must subscribe to the OTC Markets Disclosure and News Service to be quoted on the OTC Pink Sheets Current tier, and must also publicly file an initial Information and Disclosure Statement with a signed Attorney Letter Agreement by the issuer’s SEC attorney.

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Rule 12b-25 Q & A l Securities Lawyer 101

Rule 12b-25 Attorney

Securities Lawyer 101 Blog

Accelerated filers, non-accelerated filers and smaller reporting companies occasionally have difficulty meeting the Securities and Exchange Commission’s (“SEC”) reporting due dates. Rule 12b-25 adopted by the SEC under the Securities Exchange Act of 1934, provides an extension of the SEC’s reporting due dates.

What must an issuer do if it misses the filing due date for a quarterly or annual report?

Rule 12b-25 requires an issuer that is unable to file all or any portion of a quarterly report on Form 10-Q, an annual report on Form 10-K and certain other reports within the prescribed time period to file a Form 12b-25 (informally known as an NT 10-Q, or NT 10-K) with the SEC. Read More