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Category Archives: Crowdfunding

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Unlawful Crowdfunding? — SEC Institutes Public Administrative and Cease-and-Desist Proceeding Against Unregistered Broker-Dealer

Posted in Crowdfunding, Regulation A+, SEC News

In a proceeding on September 28th, the SEC ordered a public hearing to be held before an Administrative Law Judge within the next two months.  Further, the SEC ordered the Respondent and two companies under his control, to cease and desist from any engaging in any unlicensed and/or criminal acts of securities dealing. The Respondent… Continue Reading

Kauffman Foundation Study on Funding for Start-Ups

Posted in Crowdfunding, Start-Ups

In a recent edition of its Entrepreneurship Policy Digest, the Kauffman Foundation provides interesting data on the types of funding relied upon by emerging companies.  The report notes that approximately 40% of startup capital is in the form of bank debt.  The report also notes the increased reliance by entrepreneurs on online lending platforms.  For… Continue Reading

SEC Advisory Committee Agenda Published

Posted in Advisory Committee on Smaller and Emerging Companies, Crowdfunding, Public Companies, SEC News

The SEC announced that the next meeting held on June 3rd of its Advisory Committee on Small and Emerging Companies will focus on public company disclosure effectiveness, intrastate crowdfunding, venture exchanges, and treatment of “finders.”  The Committee also will vote on a recommendation to the Commission regarding the “Section 4(a)(1½) exemption” sometimes used by shareholders… Continue Reading

Update on SEC Rulemaking

Posted in Accredited Investor Standard, Crowdfunding, Dodd-Frank News, SEC News

Chair White, addressing the Investor Advisory Committee, provided an update on SEC rulemaking.  Chair White identified the following initiatives: the disclosure effectiveness initiative; the review of the “accredited investor” definition; action on the tick size pilot; and the adoption of final crowdfunding rules. Chair White also noted that the Commission must complete its required rulemakings… Continue Reading

UK Regulator Publishes Findings of Crowdfunding Review

Posted in Crowdfunding

Earlier this month, the UK’s Financial Conduct Authority published a paper, “A review of the regulatory regime for crowdfunding and the promotion of non-readily realizable securities by other media” (you may access the paper here:  http://www.fca.org.uk/static/documents/crowdfunding-review.pdf), which provides a post-implementation review of the market following the April 2014 effective date of regulations.  For 2014, the… Continue Reading

Securities Regulation Legislation in the Coming 114th Congress

Posted in Crowdfunding, JOBS Act News

If the current 113th Congress is any measure, we can expect the coming 114th Congress to introduce and promote bills seeking, among other matters, to facilitate capital formation, to correct oversights in the original JOBS Act, to make crowdfunded equity offerings a reality and to ease reporting complexity for smaller issuers.  Here is a link to… Continue Reading

Lender-to-thy-Neighbor: P2P Lending in Perspective

Posted in Crowdfunding, P2P Lending

Nigel Glenday is an investment banker at StormHarbour Partners, a global investment banking firm providing strategic advisory, structuring and sales & trading solutions with offices in the U.S., Europe and Asia Nigel.Glenday@stormharbour.com Closely related to the crowdfunding phenomenon has been the evolution of the peer-to-peer (P2P) lending model.1 As the early standard-bearers of P2P prepare… Continue Reading

CROWDFUNDING—Meanwhile, at the States…

Posted in Crowdfunding, SEC News

We continue to wait for the SEC to issue final crowdfunding regulations— the comment period ended in January.  Meanwhile, some states have sensed an opportunity.  Section 3(a)(11) of the Securities Act exempts “intrastate” offerings from the Securities Act when the securities sold are part of any issue “offered and sold only” to persons resident within… Continue Reading

SEC commissioner weighs in on regulatory process and capital formation

Posted in Crowdfunding, SEC News

SEC Commissioner Daniel Gallagher urged the commission on Wednesday to fulfill its mandate to promote capital formation. The SEC should institutionalize an enhanced small business focus, Gallagher said in his prepared remarks, because its current small business mandates are “generally treated as afterthoughts on the ‘back end’ of the rulemaking process.” Gallagher challenged the SEC… Continue Reading

500 Days and Counting – Where Are the Crowdfunding Rules? Bipartisan Disappointment

Posted in Crowdfunding, JOBS Act News

On August 8, 2014, Representatives Darrell Issa, Jared Polis, Scott Peters and Vern Buchanan, co-chairs of the House Innovation and Entrepreneurship Caucus, along with a bipartisan group of 26 other representatives, sent a letter to Chairman White of the SEC taking the SEC to task for failing to complete the crowdfunding rules required by Title… Continue Reading

Hearing on Oversight of the SEC’s Division of Corporation Finance

Posted in Crowdfunding, Regulation A+, SEC News

As we previously reported, the Director of the SEC’s Division of Corporation Finance, Keith Higgins, testified before the House Financial Services Committee on a broad range of matters, including the SEC’s progress in implementing the rules required by the Dodd-Frank Act and the JOBS Act, as well as the Division’s disclosure reform initiative.  Congressmen commented… Continue Reading

Remarks of Sebastian Gomez Abero, Chief of the SEC’s Office of Small Business Policy, in an ALI Webcast Titled “Crowdfunding and Reg A+: New Routes for Raising Capital”

Posted in Crowdfunding, Events, Regulation A+

On May 22, 2014, Sebastian Gomez Abero, Chief of the Office of Small Business Policy of the Division of Corporation Finance of the SEC, spoke about the SEC’s crowdfunding and Regulation A+ proposals. Mr. Gomez commented generally on a number of comments and questions raised by commenters to the proposals. Mr. Gomez also noted that… Continue Reading

Recommendations of the SEC’s Investment Advisory Committee Regarding Crowdfunding Rules

Posted in Crowdfunding, SEC News

On April 10, 2014, the Investor Advisory Committee (the “IAC”) of the Securities and Exchange Commission (the “SEC”) held a meeting during which it recommended that the SEC adopt crowdfunding rules that are both consistent with the Dodd-Frank Act and commensurate with the risks inherent in allowing early stage start-up companies to sell securities based… Continue Reading

SEC Issues New and Revised Guidance on Intrastate Crowdfunding

Posted in Crowdfunding

On April 10, 2014, the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) issued one revised and two new compliance and disclosure interpretations (“C&DIs”) regarding crowdfunding and Rule 147 under the Securities Act of 1933, as amended (the “Securities Act”), which are summarized below.  Section 3(a)(11) of the Securities Act (“Section… Continue Reading

Fed Governor Addresses Crowdfunding

Posted in Crowdfunding

Governor Jeremy C. Stein spoke at the Crowdfunding for Community Development Finance Conference today (see remarks at: http://www.federalreserve.gov/newsevents/speech/stein20140324a.htm).  Fed Governor Stein’s remarks emphasized that perhaps all too often crowdfunding is associated only or primarily with tech companies or start-ups, but that crowdfunding may be used for other purposes.  In particular, he focused attention on crowdfunding… Continue Reading

Free Friday

Posted in Crowdfunding, Events

On Friday, January 10, Practising Law Institute will be hosting a “Free Friday” during which the briefing “Wisdom of Crowds: A Review of the Proposed Crowdfunding Regulatory Framework” will be accessible to everyone for free. The briefing, which was presented in November by David Lynn and Anna Pinedo, focuses on the proposed rules implementing the… Continue Reading

A Year End Look at the JOBS Act

Posted in Crowdfunding, IPO On-Ramp, JOBS Act News, Regulation A+, Rule 506 Rulemaking

2013 has proven to be a strong year for IPOs.  According to a recent PWC study, total IPO volume for 2013, as of December 17, reached 237 public company debuts, which is an increase over 2012.  The overwhelming majority of these IPOs were completed by issuers that qualified as emerging growth companies.  (The full details… Continue Reading

Standing out from the Crowd: A Closer Look at the SEC’s and FINRA’s Proposed Crowdfunding Rules

Posted in Crowdfunding

In this alert, we provide a detailed overview of the proposed regulatory framework that will be applicable to crowdfunding offerings conducted pursuant to Title III of the JOBS Act in reliance on Section 4(a)(6) of the Securities Act. As we have noted in our prior initial observations related to the rules proposed by the Securities… Continue Reading

Observations Drawn from SEC’s Crowdfunding Proposal

Posted in Crowdfunding

Even if you have no interest in crowdfunding, there are a number of interesting elements in the SEC’s crowdfunding proposal that may have broader applicability. Phased disclosure:  the crowdfunding proposal incorporates a number of information requirements.  An issuer that intends to engage in a crowdfunded offering must prepare certain disclosures, which will be filed on… Continue Reading

Wisdom of Crowds: A Review of the Proposed Crowdfunding Regulatory Framework

Posted in Crowdfunding, Events

On November 15, 2013 at 1:00 pm, Morrison & Foerster partners David Lynn and Anna Pinedo will participate in a PLI webcast on crowdfunding. In October, the Securities & Exchange Commission approved proposed rules implementing the JOBS Act mandate to create an exemption from registration for certain crowdfunded offerings. The proposal, which was long-awaited, outlines… Continue Reading

FINRA Regulatory Notice on Crowdfunding Portals

Posted in Crowdfunding

Today, FINRA released a regulatory notice with proposed funding portal rules and solicited comments on the seven rules—Funding Portal Rules 100, 110, 200, 300, 800, 900 and 12009—and related forms. The FINRA release is available here:  http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p370743.pdf The proposed regulations are available here:  http://www.finra.org/web/groups/industry/%40ip/%40reg/%40notice/documents/industry/p369763.pdf

Crowdfunding Proposal

Posted in Crowdfunding, SEC News

Here is a link to the proposed rule: http://www.sec.gov/rules/proposed/2013/33-9470.pdf. Press release with accompanying fact sheet: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540017677  

Crowdfunding Proposal: Quick First Look

Posted in Crowdfunding, SEC News

Today the SEC voted to propose a crowdfunding framework.  We provide highlights below based on today’s meeting: Intermediaries:  All offerings must be conducted through an intermediary that is either a registered broker-dealer or a registered funding portal.  The Commission is proposing a series of rules governing the activities of intermediaries participating in crowdfunding offerings.  The… Continue Reading