Preparing for an A+ grade: financial statements
Just over four weeks to go to effectiveness of new Regulation A, and time for another post on Reg A+ topics. This time I’d like to discuss Tier 1 financial statements. I’ve seen some chatter to the effect that while financial statements for Tier 2 offerings must be audited, Tier 1 financials must be reviewed by a CPA. […]
Preparing for an A+ grade: “material contracts”
Five weeks to effectiveness of the changes to the SEC’s Regulation A, popularly known as A+, and we are starting a series of blog posts about getting ready to use Regulation A. And the first topic is one we haven’t seen very much chatter about: the need to file “material contracts” with the SEC as […]
Best practices for Section 17(b)
We blogged about Section 17(b) compliance some months ago. Since then some friends in the market have asked what we would recommend as best practices, and although, as always, this isn’t legal advice, here’s a useful starting point to develop your own best practices.
Can you do crowdfunding with Regulation A?
Everybody’s buzzing about the fact that on Wednesday the SEC is going to adopt changes to Regulation A, finalizing the changes to Reg A that were mandated by the JOBS Act and first proposed by the SEC in December 2013. Assuming that the SEC makes the right call on state preemption (ie, votes to have Regulation A+ offerings reviewed […]
Old scams on new platforms
Well that didn’t take long. You know those Nigerian scams where someone emails you and asks you to help him spirit millions of dollars out the country, except you have to front him the bank fees? Well, it’s turned up in crowdfunding. We are aware of a couple of instances like this: Company posts its […]
You might not think you’re a stock tout…
Sounds so disreputable, doesn’t it? But some of the SEC rules that apply to stock touts apply to several types of activity in the new online markets. Back in Ye Olden Tymes (the tech bubble days of the late 1990s) the SEC’s newly formed internet task force brought 23 enforcement actions against 44 companies and individuals in […]
Online offerings and Regulation S: EB-5 offerings
I first started going on about Regulation S and online offerings back in 2012, when I noticed that US companies were doing offerings theoretically “outside” the United States without paying any attention to the requirements of US securities law. Then CrowdCheck started working on EB-5 offerings, and we were absolutely appalled at the ignorance of securities law in […]
Federal antifraud liability in intrastate crowdfunding offerings
Wait, what? You thought intrastate offerings were exempt from federal securities law? Only bits of it. The “intrastate exemption” for offerings made within a specific state is only an exemption from the laws that govern registration with the SEC. There is NEVER any exemption from the antifraud laws. If you use the “jurisdictional means” (eg telephones or the intertubes, even behind […]
Getting ready for seeking investment: Part 5 — Are you in “good standing”?
Here’s another sad story from our “fail files” although it has a happy ending. Entrepreneurs seeking outside investment may have seen references in subscription agreements (the agreements in which the investors agree to invest in the company and the company agrees to sell them shares or notes) to “being in good standing”. This means being […]
Deconstructing the meta crowd: not one crowd but many
How’s that for a title for a senior thesis at a liberal arts college? Point is, though, that there is no crowd in crowdfunding. There’s not one crowd but many crowds, and whether securities crowdfunding is going to work as expected depends which crowd shows up on any given day. Advocates of securities crowdfunding long […]