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Category Archives: SEC News

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A Lofty Concept: Disclosure Effectiveness

Posted in IPO On-Ramp, JOBS Act News, Public Companies, SEC News

Even before the JOBS Act had been proposed, policymakers focused on the downturn in the number of initial public offerings (IPOs) speculated that the burdensome disclosure requirements applicable to public companies were deterring private companies from undertaking public offerings. A number of market participants, including even a few then-Commissioners of the Securities and Exchange Commission… Continue Reading

SEC Approves Regulation S-K Concept Release

Posted in SEC News

At this morning’s open meeting, the SEC voted in favor of a concept release on Regulation S-K.  In her opening remarks, Chair White noted that the disclosure regime is central to the SEC’s mission of fostering transparency and promoting investor confidence.  Regulation S-K has become the key regulation addressing the business and financial information that… Continue Reading

OTC Markets Group Inc. on Rule 15c2-11, the “Piggyback” Exception and Secondary Trading Markets

Posted in JOBS Act News, Regulation A+, SEC News

OTC Markets Group Inc. (“OTC Markets Group”) operates the OTCQX® Best, OTCQB® Venture and Pink® Open markets for 10,000 securities.  Our wholly-owned subsidiary, OTC Link LLC, operates OTC Link® ATS, an SEC regulated alternative trading system that directly links a diverse network of broker-dealers providing liquidity and execution services. We appreciate Morrison & Foerster raising… Continue Reading

The “Piggyback” Exception of Rule 15c2-11 and Secondary Trading Markets

Posted in SEC News

Speaking in the context of the secondary market for the securities of privately held companies, Luis Aguilar, former Commissioner of the SEC, recently voiced concern that the “piggyback” exception of Exchange Act Rule 15c2-11 may compromise the integrity of market quotations and hinder the creation of a fair and efficient secondary market by allowing broker-dealers… Continue Reading

FinCEN Proposes to Amend Definition of Broker-Dealer in Securities to Include Funding Portals

Posted in Broker-Dealer Registration, JOBS Act News, SEC News

The Financial Crimes Enforcement Network (FinCEN) proposed to amend the Bank Secrecy Act’s (BSA) definition of “Broker or Dealer in Securities” to include funding portals  in order to ensure that funding portals implement policies and procedures reasonably designed to achieve compliance with the BSA requirements, including the filing of suspicious activity reports, currently applicable to… Continue Reading

Chair White Addresses Pre-IPO Private Placements and Staying Private Longer

Posted in IPO On-Ramp, Private Placements, SEC News

Speaking at Stanford, Chair White addressed a broad range of issues affecting the technology sector, including the decision on the part of many privately held companies to defer their IPOs, to rely on exempt offerings to raise capital, and to rely on private secondary markets to create liquidity opportunities for existing stockholders. Chair White commented… Continue Reading

Recent SEC Warnings Regarding the Use of Non-GAAP Financial Measures

Posted in SEC News

In recent speeches, SEC Chair Mary Jo White and Chief Accountant James Schnurr have addressed the SEC’s growing concern regarding the use of non-GAAP measures in financial reporting.  The SEC initially adopted Regulation G in 2003, which permits issuers to provide non-GAAP measures in financial statements and disclosures where such financial information can supplement other… Continue Reading

SEC Issues Guidance with respect to the Conversion of a REIT’s OP Units

Posted in SEC News

On March 14, 2016, the Staff of the Securities and Exchange Commission (SEC) issued interpretative guidance in response to a request from Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated with respect to the required Rule 144 holding period following the exchange of partnership interests in an umbrella operating partnership (OP units)… Continue Reading

NASDAQ Resubmits Proposed Rule on Golden Leash Arrangements

Posted in SEC News

On March 15, 2016, the NASDAQ Stock Market LLC resubmitted its proposed rule requiring NASDAQ-listed companies to publicly disclose third-party compensation arrangements for board members and board nominees, commonly referred to as “golden leash” arrangements.  Golden leash arrangements arise when activist shareholders offer to compensate board nominees in connection with their candidacy or service on… Continue Reading

Maloney Introduces Board Gender Diversity Bill

Posted in SEC News

Congresswoman Carolyn Maloney introduced HR 4718, which would require that the SEC establish a Gender Diversity Advisory Group.  The Group would be responsible for studying and making recommendations to the Commission on strategies to promote gender diversity on public company boards.  A report on the study would be required within nine months of the Group’s… Continue Reading

Board Diversity

Posted in SEC News

A group of Democratic Congressmen wrote to Chair White urging the Securities and Exchange Commission to take action to consider additional disclosure requirements regarding board of director diversity. See the letter here.

Funding Portal Small Entity Compliance Guide

Posted in Crowdfunding, SEC News

The staff of the Securities and Exchange Commission recently posted an updated “small entity compliance guide” that summarizes and explains the rules adopted by the SEC that implement a regulatory framework for intermediaries that facilitate crowdfunding transactions (Title III/Section 4(a)(6) crowdfunding pursuant to Regulation Crowdfunding).  The guide serves as a useful reference regarding the registration… Continue Reading

SEC Review of the Definition of an Accredited Investor

Posted in Accredited Investor Standard, SEC News

At the Practising Law Institute’s SEC Speaks program held on February 19-20, SEC staff members and representatives of the Division of Corporation Finance addressed the Report on the Review of the Definition of “Accredited Investor”, published in December 2015.  The study, mandated by Dodd-Frank, addressed the current definition of an “accredited investor”, which has not been… Continue Reading

NYSE Rule Requiring Foreign Private Issuers to Submit Semi-Annual Unaudited Financial Information on Form 6-K is Now Effective

Posted in SEC News

The NYSE’s proposed rule requiring foreign private issuers (“FPIs”) to submit semi-annual unaudited financial information on Form 6-K was filed with the SEC and took effect on February 19, 2016. On January 25, 2016, the NYSE reissued a proposed rule change to add new Section 203.03 to its Listed Company Manual, requiring NYSE-listed FPIs to… Continue Reading

SEC’s Advisory Committee Meeting

Posted in Accredited Investor Standard, Advisory Committee on Smaller and Emerging Companies, Disclosure Requirements, SEC News

In connection with today’s meeting of the SEC’s Advisory Committee on Smaller and Emerging Companies, Chair White made introductory remarks.  Chair White touched on a number of the initiatives that the Advisory Committee had addressed prior to its recent renewal.  Chair White also provided updates on a few matters, including the following: Proposed Changes to… Continue Reading

SEC Speaks Commentary

Posted in SEC News

Chair White delivered opening remarks at today’s Practising Law Institute SEC Speaks program.  During Chair White’s remarks, she commented on the Commission’s rulemakings in 2015 and provided some insight on the Commission’s priorities for 2016.  She noted that the Commission is interested in obtaining data from the Tick Size Pilot for smaller companies, which will… Continue Reading

SEC Issues Investor Alert on Crowdfunding

Posted in Crowdfunding, SEC News

With the May 2016 effective date of the new crowdfunding rules approaching, the SEC is attempting to help prepare the market.  On February 16, 2016, the SEC’s Office of Investor Education and Advocacy issued an investor bulletin relating to crowdfunded offerings.  The bulletin is intended to help educate investors about the opportunities, and the risks,… Continue Reading

A Conversation with Chair White

Posted in Accredited Investor Standard, Disclosure Requirements, Late Stage Investments, Private Placements, Rule 506, SEC News

Chair White spoke at the Annual Securities Regulation Institute in San Diego last week and participated in a Q&A session.  We have highlighted below commentary on topics of interest to our readers. Disclosure effectiveness:  Chair White noted that this initiative is one of the Commission’s important priorities.  She noted the requests for comment that had… Continue Reading

House Passes SEC Small Business Advocate Act and Fair Investment Opportunities for Professional Experts Act

Posted in Accredited Investor Standard, Capital Formation, Pending Legislation, SEC News

On February 1, 2016, the House passed H.R. 3784, the SEC Small Business Advocate Act, and H.R. 2187, the Fair Investment Opportunities for Professional Experts Act. H.R. 3784 proposes to amend the Securities Exchange Act of 1934 to establish the Office of the Advocate for Small Business Capital Formation within the SEC.   The responsibilities of… Continue Reading

GAO Publishes Report on Gender Diversity of Corporate Boards

Posted in SEC News

On December 3, 2015, the United States Government Accountability Office (GAO) published its report analyzing the history of gender diversity of U.S. corporate boards and provided recommendations for improving female board representation.  The report indicates that, following current trends, it could take 10 years for women to comprise 30% of board positions and more than… Continue Reading

FINRA Amends Proposed Funding Portal Rules

Posted in Crowdfunding, FINRA, Private Placements, SEC News

On January 21st, FINRA an amendment (see text here:  http://www.finra.org/sites/default/files/rule_filing_file/SR-FINRA-2015-040-ammendment-1.pdf) to its proposed rule changes relating to the registration, supervision and oversight of crowdfunding funding portals.  The Securities and Exchange Commission published a notice and order on January 22nd seeking comment on FINRA’s proposed rule changes on an accelerated basis.  In the notice and order,… Continue Reading

43rd Annual Securities Regulation Institute

Posted in Events, SEC News

On Monday, January 25, 2016, and Wednesday, January 27, 2016, Morrison & Foerster Partners David Lynn and Marty Dunn will chair sessions at the 43rd Annual Securities Regulation Institute in Coronado, CA. One of the most visible and highly-regarded securities and corporate law conferences in the country, the Securities Regulation Institute reaches prominent attorneys from both… Continue Reading

Looking Abroad

Posted in SEC News

Speaking today at a Practising Law Institute session, Keith Higgins, Director of the Division of Corporation Finance of the SEC, Higgins addressed a number of interesting topics.  For example, Mr. Higgins commented on the different legal frameworks for crowdfunding as among Canada, the UK and the United States.  To date, crowdfunding in the UK has… Continue Reading