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Monthly Archives: July 2012

PIPE As Usual

Posted in Rule 506

We’ve been thinking about whether the changes to Rule 506 offerings are likely to have any effect on the PIPE market.  Our preliminary conclusion is that the ability to use general solicitation is unlikely to have much effect on PIPE transactions.  An already public company generally turns to a PIPE transaction for financing because the… Continue Reading

A Capital Idea

Posted in Rule 506

Many smaller banks in the United States recently received a bit of surprising news.  The banking agencies published their notices of proposed rulemaking relating to the bank capital requirements.  The Basel III NPR made clear that only the smallest banks in the United States would be exempt from compliance with the heightened regulatory capital requirements… Continue Reading

Integration Disintegration?

Posted in Rule 506

One of the thorniest issues for securities lawyers always has been addressing potential integration questions.  We have been trained to recognize that there are heightened concerns associated with offerings occurring in close proximity to one another, or changes in offering format (from private to public or public to private offering).  Over time, the SEC has… Continue Reading

Trust, and Verify

Posted in Rule 506

In considering the relaxation of the prohibition against general solicitation and general advertising that was incorporated into the JOBS Act, Congressional attention seemed to focus on some quid pro quo arrangement that demands verification of accredited investor status.  This leads us to wonder why it takes a “trade” of this sort to justify removing the… Continue Reading

The JOBS Act and Private Funds

Posted in Rule 506

Section 201(a)(1) of the JOBS Act directs the SEC to repeal the ban on general solicitation and general advertising in securities offerings under Rule 506 of Regulation D and Rule 144A.  Can advertisements for hedge funds in Cigar Aficionado and The Wine Spectator be far behind? Not so fast.  The SEC has missed its July 4 deadline… Continue Reading

The Life Aquatic: Anchors, Pilot Fishing and Pre-Sounding

Posted in IPO On-Ramp

Have you noticed that most of the terms relating to contacting potential investors to gauge their interest in possible securities offerings take their inspiration from terms related to the sea?  We wonder why.  Probably not an homage to Jacques Cousteau or Wes Anderson.  In Europe and Asia, for some time, bankers have had greater flexibility… Continue Reading

Confirmation of the Obvious: GAO Publishes Reg A Report

Posted in Regulation A+

The JOBS Act directed the GAO to undertake a study concerning the factors impeding greater use of currently Regulation A.  The GAO study examines trends in Regulation A offerings, noting that the number of offerings increased from 1992 through 1997.  This increase followed the SEC’s changes to the offering ceiling for Regulation A offerings from… Continue Reading

Level Playing Fields and the Quiet Period

Posted in IPO On-Ramp

As the SEC turns to rulemaking related to the JOBS Act, it would be well advised to cast a skeptical eye on the quiet period that follows the pricing of an IPO.  The JOBS Act permits analysts to provide coverage on emerging growth companies prior to pricing.  It is reasonably logical to anticipate that, in… Continue Reading

FINRA Joins the Crowd: Request for Comment on Crowdfunding

Posted in Crowdfunding

Today, FINRA published Notice 12-34 requesting public comment on the scope of FINRA regulation that would be appropriate for member firms active in crowdfunding offerings. This is a welcome request, as it confirms FINRA’s role as the SRO with oversight over funding portals (which are not broker-dealers), and also seems to recognize that regulation of funding portals should… Continue Reading

A Boon for Private Placements

Posted in Rule 506

The JOBS Act was signed into law three months ago today, and much of the excitement thus far has been focused on the IPO on-ramp provisions.  However, the most significant, or perhaps most lasting, changes may actually result for the private placement market.  Although, on a relative basis, in recent years there have been fewer regulatory… Continue Reading

Title II Rulemaking Set for August 22 Open Meeting

Posted in Rule 506

On the heels of last week’s announcement by Chairman Schapiro that the SEC did not plan to adopt changes to Rule 506 of Regulation D and Rule 144A by the 90-day deadline contemplated in the JOBS Act, the SEC issued a Sunshine Act Notice announcing that the Title II rulemaking will be considered at a Commission Open Meeting… Continue Reading