FINRA Sanctions 5 Firms for Failing to Reasonably Supervise Accounts

FINRA, before the New Year 2020, sanctioned five major financial firms who failing to reasonably supervise custodial accounts. These five firms were: Citigroup Global Markets Inc.; J.P. Morgan Securities LLC; LPL Financial LLC; Morgan Stanley Smith Barney LLC;… Read More

Confidential Registration Statements Q & A – Going Public Lawyers

The confidential submission of a registration statement on Form S-1 allows a company to keep the registration statement confidential.

Diane Dalmy and Michael Woodford Charged for False Legal Opinions

On March 13, 2019, the Securities and Exchange Commission (SEC) charged attorney Diane Dalmy with fraud for “for concealing from transfer agents and brokerage firms her involvement in preparing legal opinion letters concerning the sale of certain microcap… Read More

Guy Scott Griffithe & Robert Russell Charged by SEC in Cannabis Company Scheme

A California man, Guy Scott Griffithe, and a Washington state man, Robert William Russell, were charged on Tuesday, January 21, 2020, by the Securities and Exchange Commission (SEC) for defrauding investors by selling them shares of one company,… Read More

SEC Obtains Emergency Asset Freeze Against Kenneth Courtright and TGC

On Wednesday, January 15, 2020, the Chicago Sun Times reported “A federal judge has frozen the assets of Kenneth Courtright, an Illinois man and the company he ran under the name “The Income Store” after the U.S. Securities and Exchange Commission (SEC) accused him of a “Ponzi-like scheme” that raised $75 million.” This man is named Kenneth Courtright. He founded the company and is the current chairman. Courtright was using the money from his company to overpay his mortgage and pay tuition for his kids’ private school. The Income Store is officially known as Todays Growth Consultant, Inc. (TGC).

How Does Offering Integration Impact Reg A Offerings?

Offering integration can become a problem for some issuers conducting  Regulation A+ (also known as Reg A) offerings.  The Reg A offering integration rules prevent companies from improperly avoiding SEC registration by dividing a single securities offering into multiple securities offerings to take advantage of Securities Act exemptions that would not be available for the combined offering.

Regulation D Rule 504 Securities Offering Requirements and Disclosures

Rule 504 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”) allows an issuer to raise capital of up to $5,000,000 in a 12-month.  Rule 504 allows sales to both accredited and non-accredited… Read More

SEC Charges Boaz Manor and Blockchain Terminal with Fraudulent ICO

The New York Post reported on Friday, January 17, 2020, “A convicted hedge-fund swindler assumed a fake name and donned a disguise to lure investors into a $30 million cryptocurrency fraud in New York that spanned two years.”… Read More

Regulation A Testing the Waters – Securities Lawyer 101

When dealing with potential investors, Regulation A Issuers may test the waters when implementing solicitation materials before AND after the Form 1-A  offering statement is filed with the SEC. Testing the waters has become an important part of the Regulation A Offering process.

OTC Markets Policies on Section 17(b) and Stock Promotion

The SEC and Section 17(b) Stock Promotion In the over-the-counter equities market, paid stock promotion has long been of concern to the Securities and Exchange Commission (“SEC”) and to responsible market participants.  Recently the OTC Markets has taken… Read More

SEC Proposes Improvements to Governance of National Market System

The Securities and Exchange Commission (SEC) wants to improve the regulation surrounding market data plans. They are seeking public comment on a proposed order that would modernize the governance of National Market System (NMS). According to Wikipedia, “The National… Read More

Form S-1 Registration Statement Requirements – Going Public

Form S-1 registration statements is the most commonly used registration statement form. Form S-1 permits issuers to register various types of offerings and the form can be used by both public and private companies engaged in going public transactions.  A Form… Read More

SEC Proposes to Modernize Auditor Independence Rules

On December 30, 2019, just before the start of the new year, the Securities and Exchange Commission (SEC) “announced that it is proposing amendments to codify certain staff consultations and modernize certain aspects of its auditor independence framework.”… Read More

Dead Stock Walking | Dormant Issuers and Reverse Merger Risks

  In recent years, the SEC has issued trading suspensions and revoked the registration of numerous publicly traded companies many of which were dormant tickers at one time. These SEC enforcement proceedings were brought under Section 12(j) of… Read More

What is Form 10 Information? Going Public Attorneys

A Form 10 registration status can cure public shell company status and has been used by many companies after reverse mergers.  Rule 144 is available to shareholders of former shell companies if:

Accredited Crowdfunding With Rule 506(c) – Going Public Attorneys

Private placement offerings under Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (“Securities Act”) are a cost-effective and relatively quick way for private companies to raise capital before, during, and after a going public transaction.

Blue Sky Laws and Secondary Trading and Resales in Regulation A Offerings

State Blue Sky laws apply to Regulation A Offerings for both the offer and sale of securities by the issuer and the resale by investors.  A sometimes overlooked consideration in  Regulation A+ offerings is how these State Blue… Read More

SEC Charges Recidivist Keith Springer with Defrauding Retirees

On December 19, 2019, the Securities and Exchange Commission (SEC) charged Sacramento, California-based investment adviser firm Springer Investment Management, Inc. dba Springer Financial Advisors (SFA) and owner Keith Springer with defrauding hundreds of retail clients, most of them… Read More

Is Regulation A the Same as Regulation A+ ? Securities and Crowdfunding Lawyers

1. Overview of the Regulation A+ Exemption On March 25, 2015, the Securities and Exchange Commission (the “SEC”) created Regulation A+ by adopting final rules to implement Section 401 of the Jumpstart Our Business Startups (JOBS) Act by… Read More

SEC Files Charges in Ponzi Scheme Targeting Hispanic Community

Edward Espinal, a 44-year-old from Wayne, New Jersey, and his company, Cash Flow Partners LLC, were charged by the Securities and Exchange Commission (SEC) on December 19, 2019, for perpetrating a Ponzi Scheme that mainly targeted members of… Read More

Is Form 10 Registration Different than Form S-1?

Form S-1 registration statements provide issuers with flexibility in going public transactions.  A registration statement on Form S-1 can be used to register specific securities for a company to sell to investors and specific shares for the company’s… Read More

Raising Money For Your Business – Private Placement Memorandums

A Private Placement Memorandum is sometimes referred to as a confidential offering circular or an offering memorandum.  A Private Placement Memorandum can be used by private companies who intend to stay private and as part of a going public transaction.

The Securities Act of 1933 – Liability Provisions

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

Going Public Rule 506(b) – The Friends and Family Round

Seed Capital and the Friends and Family Round Many small companies seeking to raise funds for their business raise initial seed capital from friends and family. Even when raising funds in a friends and family round, federal securities… Read More

SEC Awards Whistleblowers For Reporting Securities Fraud

On January 22, 2020, the  Securities and Exchange Commission (“SEC”)  announced two whistleblower awards in connection with two separate SEC  enforcement actions.  Both whistleblowers provided significant information that helped the SEC shut down two separate fraudulent schemes involving… Read More

MetLife Settles SEC Charges with $10 Million Payment

Due to longstanding internal control failures, MetLife has agreed to pay $10 million to settle the charge that was brought forward by the Securities and Exchange Commission (SEC). According to Reuters, which reported on the news, “The settlement… Read More

SEC Charges Broker-Dealers With Illicitly Profiting in Partial Tender Offer

Bluefin Trading LLC and Critical Trading LLC were charged by the Securities and Exchange Commission (SEC) on December 18, 2019, for violating what is known as the “short tender rule” and “enriching themselves at the expense of other… Read More

Form S-3 Registration Statement Eligibility and Requirements

Form S-3 is a short-form registration statement that consists primarily of information about the specific transaction. Form S-3 provides an opportunity not available by any other SEC form.

Illinois pardons over 11,000 people for low-level marijuana offenses

As CNN reports, the Governor of Illinois has decided to issue pardons for over 11,000 citizens of the state who have been convicted of low-level marijuana offenses. This action comes simultaneously with the legalization of weed for all… Read More

Blockchain of Things Inc. (BCOT) Charged by SEC for Unregistered ICO

Blockchain technology company Blockchain of Things Inc. (BCOT) settled charges brought against them by the Securities and Exchange Commission (SEC) on December 18, 2019, for conducting an unregistered initial coin offering (ICO). The New York-based startup Blockchain of… Read More