A sometimes overlooked aspect of Regulation A+ is the impact of state blue sky laws on liquidity and resales also known as secondary sales. State blue sky laws are applicable to resales by purchasers in Regulation A Offerings and vary from state to state. From a practical perspective, a company raising capital should consider liquidity for investors [&hellip…
Read MoreDilution 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...
Read MoreSEC trading suspensions often leave investors in the dark. While SEC trading suspensions may be intended to prevent investor losses, the opposite is true.
Read MoreForm 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 S-1 registration statement has two principal parts which require expansive line item SEC disclosures…
Read More1. 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 expanding Regulation A into two tiers. Regulation A+ has had a notable impact on companies going public. […]
Read MoreThe 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 sale to the public. The Securities Act also prohibits deceit, misrepresentation, and other types of fra…
Read MoreOn 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 retail investors. In the first action, the whistleblower alerted the a…
Read MoreBlockchain 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 Things conducted its ICO, in December of 2017, which was after the SEC had released its D…
Read MoreThe Boston and New York SEC and DOJ Charge Ulrik Debo and Kenneth Ciapal and Others The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ} charged Ulrik Debo, Kenneth Ciapala, Kenneth Ciapala, and a number of associates on January 2 and 3, 2020. Unusually, two different SEC regional offices took part in […]
Read MoreMost public companies realize that the Securities and Exchange Commission (the “SEC”) is a law enforcement agency. Receiving an SEC subpoena is a new experience for most market participants. SEC proceedings and actions can involve a case in federal court or an administrative action. SEC actions can be informal or formal. Any SEC subpoena should be [&hellip…
Read MoreTim Leissner, former head of Asian Investment with Goldman Sachs, has been permanently banned from the securities industry by the Securities and Exchange Commission (SEC) due to a scandal involving bribery and the Malaysian state fund 1MDB. According to the SEC’s Press Release, Leissner “obtained millions of dollars by paying unlawful bribes to v…
Read MoreThe SEC has updated its PAUSE list (Public Alert: Unregistered Soliciting Entities), “adding 23 soliciting entities, two impersonators of genuine firms, and 12 bogus regulators.” This is a great resource for investors, as it will help you to protect yourself against possible scammers. This list can be viewed here. It includes hundreds of firms, b…
Read MoreAfter the election of 2016, a lot was made of “fake news” and Facebook’s role in spreading it. Part of this large controversy involved the consulting firm Cambridge Analytica, which was run by Steve Bannon. Cambridge Analytica used the data of 87 million in violation of Facebook’s policy, and used that data to its own […]
Read MoreJan Atlas, a 74-year old attorney based in Ft. Lauderdale was charged on September 17, 2019, with “one count of securities fraud, in violation of Title 15, United States Code, Sections 77q(a) and 77x, in Case No. 19CR60258. The case is assigned to U.S. District Judge Beth F. Bloom in Fort Lauderdale. If convicted, Atlas […]
Read MoreSecurities Law Blog The Depository Trust and Clear Corporation (DTCC), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC operates through 10 subsidiaries – each of which serves a specific segment and risk profile within the securities industry. DTCC’s subsidiary, the Depository Trust Company (DTC) serves a…
Read MoreStarbucks’ stock fell today after news broke that the Securities and Exchange Commission sent a letter questioning the way that Starbucks recognizes its revenue. New accounting guidelines were implemented at the end of 2018 that is affecting many public companies. In Starbucks’ case, the SEC wanted clarification as to the reporting of a number of…
Read MoreForm 10 and 8-A can be used to register both debt and equity securities. Upon effectiveness, the issuer becomes subject to SEC reporting requirements. This is different from a Securities Act registration, in which a company registers a certain number of a class of securities (debt or equity) for a particular public distribution.
Read MoreOnce the SEC staff declares your company’s Securities Act registration statement on Form S-1 effective, the public company becomes subject to the SEC's reporting requirements .
Read MoreSEC Concept Release on Harmonization of Securities Offering Exemptions In the wake of the stock market crash of 1929, the public had lost confidence in the entirely unregulated U.S. markets. Congress sought to restore it by creating a regulatory structure. The first step taken was passage of the Securities Act of 1933 (“Securities Act”), which […]
Read MoreIts object is to render useless and worthless dormant shell companies that might otherwise be hijacked, used in reverse mergers, and ultimately pumped and dumped.
Read MoreThe SEC charged on May 9, 2019, Lloyd Schuman and Dane Janes for insider trading and for repeatedly traded and tipped on confidential information that they obtained through their respective employers. The SEC’s complaint, filed in the U.S. District Court for the Western District of Tennessee, alleges that Lloyd Schuman, of Cordova, Tennessee, learned t…
Read MoreOn May 9,2019, the SEC charged Danny Williams, the former President of Quality Companies, LLC, a former subsidiary of Indianapolis-based Celadon Group Inc., with an accounting fraud that allowed Celadon to avoid disclosing substantial losses and misrepresent its financial condition. According to the SEC’s complaint, between mid-2016 and April 2017, Dan…
Read MoreOn May 3, 2019, a federal district court entered a final consent judgment against Rocco Roveccio, a broker who was charged with defrauding customers by making unsuitable and unauthorized trades and churning customers’ accounts, which enriched the broker at the customers’ expense. The SEC’s complaint, filed in the Southern District of New Yo…
Read MoreOn April 29,2019, the SEC charged James Siniscalchi, a New York City man with continuing a previously charged scheme, stealing millions of dollars from investors who were allegedly falsely promised their funds would be used for the purchase and resale of tickets to Broadway shows and a sporting event. According to the SEC’s complaint, James Siniscalchi…
Read MoreThe SEC announced on April 29,2019, the entry of an emergency court order freezing assets related to alleged insider trading that yielded approximately $2.5 million in profits in connection with the April 12, 2019 announcement that oil-and-gas conglomerate Chevron Corporation intended to acquire Anadarko Petroleum Corporation. The SEC’s complaint, whic…
Read MoreOn April 26, 2019, the SEC charged Christopher Dougherty and several entities he controlled, with operating a Ponzi scheme that defrauded his investment advisory clients out of $7 million. The San Diego District Attorney’s Office separately announced criminal charges related to the same conduct. The SEC alleges that Christopher Dougherty provided inves…
Read MoreThe SEC charged on April 25,2019, an Indianapolis-based Celadon Group Inc. with an accounting fraud that allowed the truckload freight company to avoid disclosing substantial losses and misrepresent its financial condition. In a complaint filed in federal court in Indianapolis, the SEC charged that between mid-2016 and April 2017, Celadon avoided recognizing…
Read MoreOn April 18, 2019, the United States District Court for the Southern District of New York, ordered a former broker, Zachary Berkey, to pay $106,000 in disgorgement, plus prejudgment interest, and $71,000 in civil penalties. The SEC charged Zachary Berkey on December 6, 2017, alleging that, while a broker at Four Points Capital Partners LLC, […]
Read MoreOn April 23, 2019, the SEC obtained an emergency asset freeze and temporary restraining order to halt an ongoing fraudulent securities offering by Eric Lyons, a Massachusetts resident, in an attempt to conceal his misappropriation from certain hedge funds Eric Lyons advised through his Massachusetts-based investment advisory businesses. According to the SEC…
Read MoreThe SEC charged David Loflin on April 22,2019, for his role in a pump-and-dump scheme in the stock of Greenway Design Group, Inc., a Phoenix, Arizona company that was secretly controlled by David Loflin’s now-deceased business partner. According to the SEC’s complaint, in 2013, David Loflin helped his business partner gain control of Greenway, us…
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