Header graphic for print
MoFo Jumpstarter For jumpstarts, upstarts and start-ups

Category Archives: SEC News

Subscribe to SEC News RSS Feed

Practice Pointers on Navigating the Securities Act’s Prohibition on General Solicitation and General Advertising

Posted in C&DI, Communications, General Solicitation, JOBS Act News, SEC News

The SEC has not explicitly defined the terms “general solicitation” or “general advertising” in Regulation D under the Securities Act of 1933.  However, Rule 502(c) of Regulation D lists several examples of general solicitation and general advertising, including (1) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or… Continue Reading

D.C. Circuit Court of Appeals Upholds Regulation A+

Posted in Accredited Investor Standard, Regulation A+, SEC News

On June 14, 2016, the D.C. Circuit Court of Appeals in Lindeen v. SEC upheld Regulation A+, including the SEC’s definition of “qualified purchaser.”  The decision comes after petitioners William F. Gavin and Monica J. Lindeen, the chief securities regulators for Massachusetts and Montana, respectively, petitioned the court to vacate the SEC’s promulgation of Regulation… Continue Reading

SEC Issues Interim Final Rule Required by the FAST Act Regarding Form 10-K Summary Page

Posted in FAST Act, SEC News

On June 1, 2016, the SEC issued an interim final rule to implement Section 72001 of the Fixing America’s Surface Transportation (FAST) Act, which requires the SEC to issue regulations to permit issuers to submit a summary page on Form 10–K, but only if each item on such summary page includes a cross-reference (by electronic… Continue Reading

SEC Completes JOBS Act Rulemaking with Amendments to Exchange Act Registration Rules

Posted in Accredited Investor Standard, Exchange Act Registration Thresholds, FAST Act, JOBS Act News, SEC News

The SEC recently adopted rules implementing Title V and Title VI of the Jumpstart Our Business Startups Act (the “JOBS Act”) and Title LXXXV of the Fixing America’s Surface Transportation Act (the “FAST Act”). Title V and Title VI of the JOBS Act, in relevant part, amended Sections 12(g) and 15(d) of the Securities Exchange… Continue Reading

SEC Issues C&DIs and Small Entity Compliance Guides for Crowdfunding

Posted in C&DI, Crowdfunding, Disclosure Requirements, SEC News

On May 13, 2016, the SEC issued new Compliance and Disclosure Interpretations (“C&DIs”) on Rules 100 (Crowdfunding Exemption and Requirements), 201 (Disclosure Requirements), 204 (Advertising) and 205 (Promoter Compensation) of Regulation Crowdfunding.  Highlights of the C&DIs include the following: Information not constituting an offer of securities may be disseminated by an issuer prior to the… Continue Reading

What is the RAISE Act and How Useful will it be to Sellers of Private Company Shares?

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

With the enactment of the Jumpstart Our Business Startups (JOBS) Act of 2012, private companies have the ability to defer an IPO and SEC reporting, and remain private longer than at any time in the past.  One result, however, is that shareholders and employees of these companies now face a much longer wait time for… Continue Reading

SEC Issues New C&DIs on the Use of Non-GAAP Financial Measures

Posted in Accounting Standards Transition, C&DI, Disclosure Requirements, SEC News

On May 17, 2016, the staff of the SEC Division of Corporation Finance (the “Staff”) issued 12 new Compliance & Disclosure Interpretations (“C&DIs”) on the use of non-GAAP financial measures, which has recently been an area of concern for the SEC.  The C&DIs cover a variety of topics, including compliance with Rule 100(b) of Regulation… Continue Reading

SEC’s Continued Concern with the Use of Non-GAAP Financial Measures

Posted in Accounting Standards Transition, Disclosure Requirements, SEC News

On May 5, 2016, SEC Deputy Chief Accountant Wesley Bricker and the SEC Division of Corporation Finance’s Chief Accountant Mark Kronforst spoke at the 2016 Baruch College Financial Reporting Conference. Deputy Chief Accountant Bricker identified several specific concerns with non-GAAP reporting practices.  First, the use of individually tailored accounting principles to calculate non-GAAP earnings fails to… Continue Reading

SEC Approves Amendments to Implement FAST Act

Posted in FAST Act, JOBS Act News, SEC News

The SEC approved amendments to revise the rules related to the thresholds for registration, termination of registration, and suspension of reporting under Section 12(g) of the Securities Exchange Act. These amendments implement provisions of the Jumpstart Our Business Startups Act (JOBS Act) and the Fixing America’s Surface Transportation Act (FAST Act). To implement the JOBS… Continue Reading

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