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Category Archives: SEC News

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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

Weeding Out Bad Actors

Posted in Rule 506 Rulemaking, SEC News

Issuers, placement agents and attorneys have been working with the new Rule 506(d) “bad actor” provisions for almost one year.  Our Client Alert summarizes recent SEC guidance in this area, and provides some practical tips on how to identify any bad actors in advance of a Rule 506 offering.   We also take a look at… Continue Reading

Kind-a-Sort-a

Posted in CFTC, General Solicitation, SEC News

In the last few days, we received a few inquiries regarding our prior post on the CFTC’s temporary relief permitting funds to engage in general solicitation to the text that the funds were conducting Rule 506(c) offerings or relying on Rule 144A for resales.  Following the SEC’s amendments to Rule 506 and Rule 144A, many… Continue Reading

Reg A+ Challenged Again

Posted in Regulation A+, SEC News

Another letter to the SEC from the Hill challenges the Regulation A+ proposal.  This time, the authors question the authority of the SEC in defining “qualified purchaser” as an offeree or purchaser in a Tier 2 Reg A+ offering.  The letter (available here:  http://www.nasaa.org/wp-content/uploads/2014/08/Senate_Regulation-A-Letter-FINAL-08-01-14.pdf) suggests that the SEC through the approach taken in its proposal… Continue Reading

SEC Investor Alert on Unregistered Offerings

Posted in Private Placements, SEC News

Earlier this week, the SEC’s Office of Investor Education issued an Investor Alert that highlights some of the warning signs for investors that an unregistered offering may be an investment scam.  The alert is available here:  http://www.sec.gov/oiea/investor-alerts-bulletins/ia_unregistered.html#.U-Pk66XD9l4.

Disclosure Reform

Posted in SEC News

Today, the US Chamber of Commerce’s Center for Capital Markets Competitiveness hosted a half-day session on “Corporate Disclosure Reform: Ensuring a Balanced System that Informs and Protects Investors and Capital Formation.”  The session, which was webcast through the Chamber’s site, included various presentations from former SEC officials, as well as from Keith Higgins, Director of… 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

SEC Requires Floating NAV for Institutional Money Market Funds; IRS Eases Tax Reporting Burden for Fund Investors

Posted in SEC News

A divided Securities and Exchange Commission today adopted rules that will require floating net asset values (NAVs) for institutional money market funds and give most money market funds the discretion to impose liquidity fees and gates.  The 3-2 vote, which closes the latest tumultuous chapter of money market fund regulatory reform, will fundamentally change the way that… Continue Reading

Financial Services Committee Hearing May Provide Insights

Posted in JOBS Act News, SEC News

This Thursday, July 24th, the Capital Markets and Government Sponsored Enterprises Subcommittee will hold a hearing with Keith Higgins, Director of the SEC’s Division of Corporation Finance, to review the SEC’s rule proposals to implement the JOBS Act and the Dodd-Frank Act, proxy advisory firms, as well as Chair Mary Jo White’s call for a… Continue Reading

SEC Staff Provides Rule 506(c) Verification Guidance

Posted in Private Placements, Rule 506 Rulemaking, SEC News

The SEC Staff recently provided further guidance on the provisions of Rule 506(c) of Regulation D which permit the use of general solicitation and general advertising when sales are made only to accredited investors and the issuer verifies the accredited investor status of the purchasers.  The Staff has now clarified certain aspects of the verification… Continue Reading

SEC Staff Closes Loophole on BDC Asset Coverage Requirements

Posted in 1940 Act, BDCs, Investment Management, SBIC, SEC News

In a Guidance Update published on June 30, 2014 by the SEC’s Division of Investment Management, the staff closed a loophole that allowed business development companies (BDCs) with wholly owned Small Business Investment Company (SBIC) subsidiaries to avoid meeting asset coverage requirements when the SBIC subsidiaries issue debt that is not guaranteed by the Small… Continue Reading

SEC Announces Order for Tick Size Pilot Plan

Posted in SEC News

On June 25, 2014, the Securities and Exchange Commission (the “SEC”) announced that it had ordered the national securities exchanges and the Financial Industry Regulatory Authority, Inc. (“FINRA”) to act jointly to develop and file with the SEC a national market system plan to implement a targeted 12 month pilot program that will widen minimum… Continue Reading

Investor Advisory Committee

Posted in SEC News

On July 10, the Investment Advisory Committee will be meeting to consider various topics, including the definition of the term “accredited investor.”  The Committee had previously discussed amendments to the natural persons prong of the definition to better account for the financial sophistication of purchasers.  Meetings are webcast. Read the meeting notice here. Read the… Continue Reading

SEC Staff Guidance on the Use of Social Media in Securities Offerings, Tender Offers, Business Combinations and Proxy Contests

Posted in SEC News

The staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission recently provided guidance on the applying its rules regarding communications in connection with securities offerings, tender offers, business combinations and proxy contests when statements are made utilizing certain social media channels. The staff’s guidance permits the use of a hyperlink… Continue Reading

Disclosure Overload and “Cutting the Clutter”

Posted in JOBS Act News, SEC News

In various speeches recently, SEC representatives have addressed the need for disclosure reform following the December 2013 release of the JOBS Act-mandated Regulation S-K study.  The disclosure review will begin by considering the disclosures that flow into periodic reports.  In addition, the Staff also will evaluate whether Industry Guides and form specific disclosures should be… 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

Foreign (non-U.S.) Issuers

Posted in JOBS Act News, SEC News

The SEC recently provided some data on registered offerings by foreign issuers, noting that In 2013, there were approximately 50 new foreign registrants; Since the passage of the JOBS Act, there have been over 100 foreign private issuers making confidential submissions to the SEC; Over half of these submissions resulted in public filings of registration… Continue Reading

ECCF

Posted in SEC News

Recently, Craig Lewis, the Chief Economist and Director of the SEC’s Division of Economic and Risk Analysis, commented (see speech at:  http://www.sec.gov/News/Speech/Detail/Speech/1370541497283#.U08MNVTD_zY ) on the economic impact of various JOBS Act reforms, or the effects on “efficiency, competition, and capital formation” (ECCF). In his remarks, Lewis notes that smaller companies may face informational frictions that… Continue Reading

JOBS Act: From A+ to D

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

Today is the end of the comment period on the SEC’s proposing release concerning Regulation A+.  A number of comment letters already have been filed and are available here: http://www.sec.gov/comments/s7-11-13/s71113.shtml.  Additional comment letters are likely to be received in the next few days.  The letters overwhelmingly support the SEC’s approach. In a recent speech, SEC… Continue Reading

Testing the Waters

Posted in Emerging Growth Company Status, IPO On-Ramp, SEC News

An issuer that is considering or that has commenced an initial public offering (“IPO”) should take special care to familiarize itself with the communications rules applicable to offerings. First, an issuer should keep in mind that communications may be viewed as impermissible “gun jumping” activities designed to condition the market for the issuer’s securities.  Second,… Continue Reading

What’s Next for the Commission?

Posted in JOBS Act News, SEC News

At a recent program, S.E.C. Speaks, Chair White noted that the Commission continues to move forward to complete rulemakings required under the JOBS Act related to exempt offerings.  She noted that while the Act makes it easier for companies to remain private longer and to rely on exempt offerings, the Commission will devote attention to… Continue Reading