SEC Amends Accredited Investor Definition

New Accredited Investor Rules On August 26, 2020, the SEC amended the definition of “Accredited Investor” and “qualified institutional buyer” under Rule 501(a) of Regulation D under the Securities Act of 1933 (the “SEC Amendments”). The financial criteria… Read More

SEC Says toxic funder John M. Fife is an Unregistered Dealer

The SEC filed an enforcement action against John Fife, an unregistered dealer and 5 companies he controlled including St. George Investments LLC and Tonaquint, Inc. According to the SEC, Fife and his companies had acted for years as securities dealers, but failed to register with the SEC and with the Financial Industry Regulatory Authority (“FINRA”) as the Securities Exchange Act of 1934 (“Exchange Act”) requires.

SEC Says Ibrahaim Almagarby and Microcap Equity Group Are Unregistered Dealers

We’ve previously written about Securities and Exchange Commission (“SEC”) enforcement actions pending against John Fierro and Justin Keener alleging unregistered dealer activity. Filed in February and March 2020 respectively, they are similar to a lawsuit the agency brought… Read More

Business Identity Theft: State of the Industry Report

As business owners, it’s important that you watch out for all of these forms of business identity theft. Your business, whether big or small, is vulnerable to all of these schemes, just by virtue of being in business.

AmTrust and Ronald E. Pipoly, Jr Charged with Faulty Loss Reserves Disclosures

On June 17th, 2020, the SEC charged international insurance company AmTrust Financial Services, Inc. and its former CFO Ronald E. Pipoly Jr. with failing to disclose material facts …

SEC Obtains Final Judgments Against Daniel Adams, Michael Flanders, Spiderworx Media LLC, and An L.A. Minute LLC

The SEC has obtained final judgments against movie director and convicted felon Daniel Adams, music producer Michael Flanders, and companies under their control for defrauding two investors in connection with financing the movie entitled An L.A. Minute.

SEC Says Dilution Funder John Fierro is a Dealer Not a Trader

Dilution Funders and Dilution Financings Challenged by SEC

SEC Obtains Judgment Against Giga Entertainment, Inc. CEO Gary Nerlinger

The U.S. District Court for the Eastern District of New York entered a final judgment as to monetary relief against the former de facto CEO of Giga Entertainment Media, Inc., Gary S. Nerlinger, whom the SEC previously charged in connection with a scheme to mislead investors.

SEC Settles with Three Defendants in Boiler Room Scheme

The SEC announced that it has obtained final judgments by consent against Ronald Hardy, Anthony Vassallo, and Sergio Ramirez charged for their roles in a $10 million boiler room scheme.

SEC Reaches Settlements with Traders in Newswire Hacking and Trading Scheme

The SEC announced  that it has obtained court approval of settlements with eight defendants: Arkadiy Dubovoy, Igor Dubovoy, Southeastern Holding and Investment Company LLC, APD Developers, Inc., Leonid Momotok, Aleksandr Garkusha, Vladislav Khalupsky, and Memelland Investments Ltd, charged in connection with an international scheme to trade on hacked news releases.

What Is a Control Person? Control Securities, Resale Requirements

Sales of restricted securities by affiliates and control persons of publicly traded companies are subject to requirements not applicable to other sellers under federal securities laws. Control person and affiliate are defined by Rule 405. 

SEC Form 3, Insider Reporting Requirements

Form 3 must be filed within ten (10) calendar days after a person becomes a Section 16 insider. Form 3 is a simplified SEC form that allows insiders to report initial ownership information.

SEC Trading Suspensions Under the Securities Exchange Act

When the SEC issues a trading suspension pursuant to Section 12(k), trading in the security is halted for the period set forth in the order which is typically the full 10 days.

SEC Charges Jason C. Nielsen in Manipulative Trading Scheme Involving Covid-19 Claims

The SEC charged Jason C. Nielsen, a penny stock trader in Santa Cruz, California, with conducting a fraudulent pump-and-dump scheme in the stock of a biotechnology company by making hundreds of misleading statements in an online investment forum, including a false assertion that the company had developed an “approved” COVID-19 blood test.

SEC Enters Final Judgment Against Brandon Copeland, E.B. & Copeland Capital, Inc.

United States District Court for the Northern District of Ohio entered final consent judgments against recidivist investment adviser Brandon E. Copeland and his advisory firm, E.B. & Copeland Capital, Inc.

SEC Obtains Preliminary Injunction Against Paul Horton Smith, Sr., Northstar Communications, LLC, Planning Services, Inc. and eGate

The United States District Court for the Central District of California entered a preliminary injunction and orders freezing assets and imposing other relief against California-registered investment adviser Paul Horton Smith, Sr. and his entities in connection with a Ponzi scheme targeting senior citizens.

SEC Obtains Judgements Against Stiefel Laboratories and Charles Stiefel

The SEC announced that it has obtained final judgments that will require a former privately held dermatology products manufacturer, Stiefel Laboratories, and its former chairman and CEO, Charles Stiefel to pay $37 million for the benefit of shareholders whom they defrauded through share buybacks that were improperly undervalued.

Is My Dilution Funder a Dealer? – SEC Toxic Financing Actions

Dilution Funders have been charged by the SEC as unregistered dealers in violation of the Securities Exchange Act. Justin Keener and his company, JMJ Financial and John Fierro and his company, JDF Capital, Inc. are…

SEC Freezes Assets Against Daniel Putnam, Jean Paul Rico, and Angel Rodriguez

On June 5, 2020, the SEC announced an asset freeze against Daniel F. Putnam, of Utah, Jean Paul Ramirez Rico, of Colombia, and Angel A. Rodriguez, of Utah, who allegedly defrauded investors in two cryptocurrency-related schemes.

Regulation CF Crowdfunding and SEC Reporting After the Offering

After an issuer completes a Regulation CF crowdfunding offering, it must comply with certain ongoing reporting obligations. Unlike public company SEC reporting requirements, Regulation CF’s ongoing reporting requirements consist of only one filing annually. 

Rule 504 Offerings – Regulation D Attorneys

Securities offerings under Rule 504 of Regulation D of the Securities Act may prove useful to founders of startup and small companies. 

SEC Provides Form S-3 Coronavirus Relief – Securities Lawyer 101

The SEC has provided relief to Form S-3 issuers because of coronavirus. Form S-3 is a short-form registration statement that consists primarily of information about the specific transaction.

Public Company SEC Reporting Requirements -SEC Requirements to Go Public

Public Company SEC Reporting Requirements – SEC Requirements to Go Public, Going Public Attorneys. Companies filing registration statements with the SEC become subject to the SEC reporting requirements three ways.

What is a SEC Trading Suspension? Securities Lawyer 101

SEC trading suspensions often leave investors in the dark. While SEC trading suspensions may be intended to prevent investor losses, the opposite is true.

Expedited Regulation Crowdfunding Offering Rules For Coronavirus Impacted Issuers

The SEC’s Regulation Crowdfunding temporary rules are intended to expedite the crowdfunding offering process for smaller, previously established companies directly or indirectly affected by COVID-19.

Section 4(a)(7) Resale Exemption – FAST ACT

Section 4(a)(7) provides an exemption for  private resales from the SEC’s (“SEC”) registration statement requirements if certain conditions are met.  One of the benefits of Section (a)(7) is that unlike the Section 4(a)(1½) exemption, state blue sky laws are preempted.

The Section 4(a)(2) Exemption – Exempt Offerings

Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) provides an exemption from the SEC’s registration statement requirements for transactions by an issuer and do not involve a public offering of securities. Section 4(a)(2) is the most widely used exemption for securities offerings in the U.S. Shares sold in reliance upon Section 4(a)(2) are restricted securities and may not be resold absent SEC registration or an exemption therefrom.

Rule 12b-25 Q & A – SEC Reporting Requirements

Form 12b-25 and Rule 12b-25 provide relief for issuers unable to meet SEC reporting requirements on time. Rule 12b-25 grants..

What Is SEC Form 5 – SEC Reporting Requirements- Securities Lawyer 101

Section 16 insiders must file an Annual Statement of Changes in Beneficial Ownership on Form 5 if there are any transactions in the company’s equity securities that were not previously reported on a Form 4, other than transactions that are exempt from Form 5’s SEC reporting requirements. Form 5 is a mandatory SEC Form that should not be …

Form S-1 Selling Shareholders Disclosures – Going Public Lawyers

Securities Lawyer 101 Blog Companies going public have a variety of structures for their transactions. Companies can sell shares in reliance upon Rule 506 of Regulation D and file a selling shareholder registration statement with the Securities and Exchange… Read More