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Category Archives: Crowdfunding

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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

Crowdfunding Webcast

Posted in Crowdfunding, Events

On Tuesday, October 22, 2013, Morrison & Foerster partner David Lynn will participate in a ALI CLE webcast entitled “Crowdfunding: Will It Expand Your Clients’ Capital Raising Options?” The seminar will focus on the existing and proposed options for crowdfunding and how they may change capital raising options. For more information about the event, and… Continue Reading

Private Equity Structuring: The Basics

Posted in Crowdfunding, Events, SEC News

On Thursday, October 3, 2013, Morrison & Foerster partner Anna Pinedo will participate in an NYC Bar CLE conference. She will be speaking on a panel entitled “Compliance and New SEC Regulatory Opportunities for Private Equity Firms and the Ethical Implications” focusing on practical considerations and legal and compliance issues arising with general solicitation, crowdfunding… Continue Reading

FINRA to Consider Request for Comment on Crowdfunding

Posted in Crowdfunding

In its upcoming July 11th meeting, FINRA will consider a proposal to solicit comment via Regulatory Notice on proposed rules and related forms governing funding portals pursuant to Title III of the JOBS Act.   See the FINRA release:  http://www.finra.org/Industry/Regulation/Guidance/CommunicationstoFirms/P292644.

Final Report of SEC Forum on Small Capital Formation

Posted in Crowdfunding, Regulation A+, Rule 506 Rulemaking, SEC News

The SEC recently posted on its website the Final Report from the 2012 SEC Government-Business Forum on Small Capital Formation, which was held in the fall of 2012.  The report may be accessed at http://www.sec.gov/info/smallbus/sbforum.shtml.  The report includes 35 recommendations from the Forum, with quite a number of these focused on crowdfunding.  Setting aside those… Continue Reading

Class Action Relief in Crowdfunded Offerings?

Posted in Crowdfunding

In a recent speech, NASAA President Heath Abshure, while expressing support for increased access to capital formation, noted NASAA’s concerns about civil remedies for investors, including investors that participate in crowdfunding.  Abshure noted that “for crowdfunding to be successful, class action relief must be available to investors who are defrauded in an offering of crowdfunded… Continue Reading

JOBS Act at Year 1

Posted in Crowdfunding, Decimalization, Emerging Growth Company Status, Exchange Act Registration Thresholds, IPO On-Ramp, Private Placements, Regulation A+, Research, Rule 506 Rulemaking

Any milestone, such as an anniversary, provides an opportunity for reflection and evaluation.  At the one-year anniversary of the JOBS Act, preliminary experience gives reason for some optimism.  The centerpiece of the JOBS Act, the “IPO on-ramp” provisions contained in Title I, have proven quite useful.  The SEC Staff’s guidance in the form of Frequently… Continue Reading

FundersClub Obtains Broker-Dealer Registration No-Action Relief

Posted in Broker-Dealer Registration, Crowdfunding, Private Placements, Rule 506 Rulemaking, SEC News

On March 26, 2013, the SEC’s Division of Trading and Markets provided no-action relief to FundersClub Inc. and FundersClub Management LLC, indicating that the Division would not recommend enforcement action under Section 15(a)(1) of the Exchange Act if FundersClub and FundersClub Management LLC operated a platform through which its members could participate in Rule 506… Continue Reading

FINRA Launches Funding Portal Form

Posted in Crowdfunding

As we noted, last month FINRA’s Board of Governors authorized FINRA to issue an interim form to seek essential information from prospective funding portals intending to apply for membership with FINRA pursuant to the JOBS Act.  FINRA has now announced the availability of the Interim Form for Funding Portals (“IFFP”), which is an online form… Continue Reading

FINRA Authorized to Use Interim Form for Funding Portals

Posted in Crowdfunding

In a recent update regarding the last meeting of the FINRA Board of Governors (see http://www.finra.org/Industry/Regulation/Guidance/CommunicationstoFirms/P197425), FINRA noted that the Board had authorized FINRA to  issue an interim form to seek essential information from prospective funding portals intending to apply for membership with FINRA pursuant to the JOBS Act.  Funding portals would file the interim… Continue Reading

Recent SEC Staff Comments on JOBS Act Implementation

Posted in Crowdfunding, Emerging Growth Company Status, Exchange Act Registration Thresholds, IPO On-Ramp, Private Placements, Regulation A+

The Staff of the SEC’s Division of Corporation Finance has been discussing the JOBS Act at recent conferences, including the Practising Law Institute’s 44th Annual Securities Regulation Institute in New York and the American Bar Association’s Business Law Section Fall Meeting in Washington, DC.  David Lynn was the moderator of a JOBS Act panel at… Continue Reading

Investor Advisory Committee of the SEC

Posted in Crowdfunding, Rule 506 Rulemaking

On Friday, September 28, 2012, the Dodd-Frank Investor Advisory Committee of the SEC met (see this agenda) and received an SEC Staff briefing on the JOBS Act. In connection with the Staff briefing, the Committee received an update from Jonathan Ingram, Deputy Chief Counsel and Lona Nallengara, Deputy Director (Legal and Regulatory) in the Division… Continue Reading

Threat Level Orange

Posted in Crowdfunding, Rule 506 Rulemaking

The state securities regulators, NASAA, just recently published their list of financial products that pose investor protection concerns.  Not surprisingly given the level of rhetoric from the states, crowdfunding and internet-based offers of securities are at the top of the list of “new threats” to investors.  The state securities regulators caution that once JOBS Act… Continue Reading