The Laws That Apply to Going Public & Being A Public Company
A private company going public is subject to three federal securities laws, each with its own unique requirements. The three laws are the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”) and… Read More
SEC Charges Toronto Consultant and Four Others in China Reverse Merger Schemes
Securities Lawyer 101 Blog On May 5, 2014, the Securities and Exchange Commission charged a Toronto-based consultant and four associates with conducting illegal reverse merger schemes to bring a pair of China-based companies into the U.S. markets so… Read More
What is a Bad Actor Under Regulation D?
Securities Lawyer 101 Blog On January 3, 2014, the Securities and Exchange Commission (the “SEC”) released Compliance and Disclosure Interpretations. The release provided useful information about several topics including the JOBS Act’s recently enacted Rule 506 (c) pursuant… Read More
FINRA Develops System To Red Flag Customer Accounts
Securities Lawyer 101 Blog The Financial Industry Regulatory Authority is seeking comments about its Comprehensive Automatic Risk Data System (CARDS) that would allow it to generate information about customer accounts at broker-dealers to identify “red flags” involving business… Read More
Going Public in 2015
For many private companies, “going public” is about more than just raising capital. It’s a sign of accomplishment. Direct public offering (“DPO”) have replaced Initial Public Offerings as a means for small businesses to obtain public company status.
SEC Sanctions Auditor Sherb & Co l Securities Lawyer 101
Securities Lawyer 101 Blog On November 6, 2013, the Securities and Exchange Commission (the “SEC”) announced sanctions against a New York-based auditing firm, its founder, two other partners, and an audit manager for their roles in the failed… Read More
FINRA Halts ALL OTC Equity Securities – Going Public Lawyers
Securities Lawyer 101 Blog On Thursday, November 7, 2013, the Financial Industry Regulatory Authority, Inc. (“FINRA”) halted trading in all OTC Equity Securities pursuant to FINRA Rule 6440(a)(3). FINRA determined to impose a temporary halt because of a… Read More
NASAA Requests Comment on Regulation A Offerings
Securities Lawyer 101 Blog On October 30, 2013, the Board of Directors of the North American Securities Administrators Association, Inc. (NASAA) released materials for public comment the about a new proposed coordinated review program for offerings exempt from registration… Read More
SEC Issues Trading Suspension of the Securities of High End Ventures
Securities Lawyer 101 Blog On October 21, 2013, the Securities and Exchange Commission (the “SEC”) announced the temporary suspension of trading in the securities of High End Ventures, Inc. The SEC’s trading suspension of High End Ventures, Inc. is due… Read More
DOJ and Swiss Federal Department of Finance Reach Agreement
Securities Lawyer 101 Blog In late August 2013, as part of its continuing crackdown on U.S. tax evaders, the Department of Justice (“DOJ”) announced an agreement with the Swiss Federal Department of Finance. While the Swiss Department of… Read More
SEC Market Data Website Debuts l Securities Lawyer 101
Securities Lawyer 101 Blog On October 9, 2013, the SEC made new market data and analysis tools available at a special section of its website. The new section will serve as a central location where the agency can… Read More
Zombie Ticker Mistaken for Twitter, Is Halted by FINRA
Securities Lawyer 101 Blog Sometimes dormant stocks—often called Zombie Tickers—run for no reason at all, but when Tweeter Home Entertainment Group took off on October 4, 2013, there was an obvious explanation: the company’s stock symbol is TWTR. … Read More
Court Finds CMKX Transfer Agent Not Substantial Participant in Fraud
Securities Lawyer 101 Blog On September 10, 2013, the Ninth Circuit Court of Appeals rejected the Security and Exchange Commission’s argument that a stock transfer agent and its principal are necessarily liable “by virtue of their position” when… Read More
Securities Attorney Martin Weisberg Sentenced in Securities Fraud and Money Laundering Case
Securities Lawyer 101 Blog On August 8, 2013, securities attorney Martin Weisberg, a former partner at Baker & McKenzie LLP, was sentenced to two years’ imprisonment and three years’ probation on his convictions for money laundering and consiracy to… Read More
The SEC Charges Diane Dalmy, and Others in Pump and Dump Scheme
Securities Lawyer 101 Blog Securities Lawyers Gone Wild Series On July 31, 2013, the Securities and Exchange Commission (“SEC”) brought an enforcement action against securities lawyer, Diane Dalmy and other entities and individuals responsible for a pump and… Read More
FINRA Red Flags l Securities Lawyer 101 Blog
Securities Lawyer 101 Blog The Financial Industry Regulatory Authority (“FINRA”) recently identified certain red flags in connection with a disciplinary action against Gar Wood Securities LLC. FINRA’s allegations centered on Gar Wood’s alleged facilitation of sales of unregistered securities in violation of the Section… Read More
FINRA Fines Newedge USA for Violations
Securities Lawyer 101 Blog On July 11, 2013, the Financial Industry Regulatory Authority (“FINRA”), announced that they and BATS Exchange, Inc., the New York Stock Exchange, NYSE Arca, and the NASDAQ Stock Market have censured and fined Newedge… Read More
SEC Obtains Record $13.9 Million Penalty Against Rajat Gupta
Securities Lawyer 101 Blog On July 17, 2013, the Securities and Exchange Commission (the “SEC”) obtained a $13.9 million penalty against Rajat K. Gupta for illegally tipping corporate secrets to former hedge fund manager Raj Rajaratnam. The SEC also… Read More
SEC Issues Trading Suspension of Norstra Energy
Securities Lawyer 101 Blog On June 26, 2013, the Securities and Exchange Commission (“SEC”) suspended trading in the stock of Norstra Energy, Inc. (“NORX”). This was the second trading suspension for cause of the week. In its action,… Read More
China MediaExpress Issuer Charged with Securities Fraud
Securities Lawyer 101 Blog On June 20, 2013, the Securities and Exchange Commission (the “SEC”) brought yet another securities fraud enforcement action against a China-based company that went public on the U.S. markets through a reverse merger. The… Read More
FINRA Granted Authority to Initiate Quotation & Trade Halts
Securities Lawyer 101 Blog Recent SEC amendments to FINRA Rule 6440, grant authority for FINRA to initiate quotation and trade halts in OTC equity securities when it is deemed necessary to protect investors. As amended, Rule 6440 grants… Read More
Does My Public Company Have to Disclose A Wells Notice?
Securities Lawyer 101 Blog A Wells Notice is sent to subjects of a Securities and Exchange Commission (“SEC”) investigation when Enforcement staff has substantially completed its investigation and intends to recommend that an enforcement be pursued. Under SEC… Read More
OTC Markets OTC Pink Sheets Uplisting – Going Public
Securities Lawyer 101 Blog The OTC Markets Group operates an electronic inter-dealer quotation system called OTC Link that broker-dealers use to trade securities not listed on a national securities-related exchange. OTC Markets rank issuers in tiers; each issuer’s… Read More
Two Years Later l FINRA Rule 6490 l Going Public Attorneys
Securities Lawyer 101 Blog FINRA Rule 6490, enacted over two years ago requires issuers of securities not listed on exchanges to provide timely notice to FINRA of certain corporate actions including reverse mergers. Rule 6490 applies to corporate… Read More
DTC Chills & Global Locks l Securities Lawyer 101
Securities Lawyer 101 Blog The Depository Trust Company (DTC) is the only stock depository in the United States. When DTC provides services as the depository for an issuer’s securities, its securities can trade electronically. Without DTC eligibility, it is… Read More
SEC Rule 10b-5 l Securities Lawyer 101
SEC Rule 10b-5 is the primary anti-fraud provision of the federal securities laws. It was adopted pursuant to Section 10(b) of the Securities Exchange Act of 1934 (“1934 Act”), as amended and is the primary rule used in securities… Read More
