Section 3(a)(10) and Regulation A
Most of the scams and schemes from the lower end of the public markets eventually make it over to the Reg A market, and this one is no exception. It’s essentially a variation on the “funder acting as undisclosed underwriter” caper. Section 3(a)(10) of the Securities Act provides that the issuance of securities pursuant to […]
Exempt securities offerings and the 2020 election
The SEC has published a Concept Release on the Harmonization of Securities Offering Exemptions. The SEC summarizes the reason for this move as follows: Over the years, and particularly since the Jumpstart Our Business Startups Act of 2012, several exemptions from registration [of offerings with the SEC] have been introduced, expanded, or otherwise revised. As […]
The crowdfunding vampires
Well, I already blogged about the zombies of the crowdfunding world, so let’s look at the vampires too. Those exploitive professionals and semi-professionals who seize on small companies desperate for capital and do nothing but suck the lifeblood from them, in terms of money, time and management focus, and deliver nothing. We are in the […]
Disseminating false statements: online platforms and the Lorenzo case
Online securities platforms should be paying attention to the Lorenzo case, which the Supreme Court decided last month concerning the scope of Rule 10b-5 fraud liability. The case involved a broker who sent out a couple of emails at the direction of his boss. The boss created the content of the emails and approved them. All Mr. […]
1-K filing time again
April is coming, when Reg A filing companies must file their annual reports. And, as has happened in the past, some company will fail to get its 1-K filed in time. The accountant was busy, the lawyers didn’t nag enough, the dog ate their filings . . . So what do you do when this […]
Throwing the baby out with the tested waters
With the recent SEC proposal that would permit all companies, as opposed to just “emerging growth companies,” to talk to institutional investors prior to filing an offering with the SEC, we are heading towards more confusion with respect to what companies raising funds can say when. The confusion stems from the fact that the Securities Act of […]
Emergency relief for Reg A issuers?
The ongoing government shutdown is hurting startups. Regulation A was amended in 2015 to give early-stage companies a way to raise funds from the general public, including online. While Reg A offerings are often referred to as “mini IPOs,” they really aren’t, for a number of reasons. IPOs are held when a company is ready […]
Miracle on Pennsylvania Avenue: A holiday story
I wrote this and posted it on my personal blog at the time of the Christmas 2012 Shutdown. Unfortunately, it seems just as relevant today. I am particularly struck by the reference to the Dow performance. Merry Christmas to all those who celebrate it. Sara [Date: many years in the future] Many memories have faded […]
Confucius on the rectification of names and securities tokens
Confucius had some thoughts on precision of language: Tsze-lu said, “The ruler of Wei has been waiting for you, in order with you to administer the government. What will you consider the first thing to be done?” The Master replied, “What is necessary is to rectify names.” “So! Indeed!” said Tsze-lu. “You are wide of […]
Tier 1 Zombies: a Regulation A scam to watch out for
We’ve noticed something interesting recently: Regulation A filings by companies that used to be SEC-reporting companies with quotes on the OTC Pink market, who have ceased to file reports with the SEC and whose trading activity on OTC has flatlined. Why would such companies file for a Reg A offering? Especially since so many of […]