On April 15, 2013, Anna Pinedo will be chairing a one-day Practising Law Institute conference (live in New York City, with various groupcast locations, as well as live webcast) titled Private Placements and Other Financing Alternatives 2013. This year’s conference will feature a number of sessions addressing JOBS Act-related developments, including an update on the… Continue Reading
Tag Archives: private placements
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 RulemakingAny 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
FINRA Updates Private Placement Filing Requirements FAQs
Posted in Private PlacementsFINRA recently posted two updates to its Private Placement Filing Requirements FAQs. http://www.finra.org/Industry/Compliance/RegulatoryFilings/PrivatePlacements/FAQ/index.htm?utm_source=MM&utm_medium=email&utm_campaign=Weekly_Update_012313_FINAL#1-4. In the first update, FINRA clarified that the Rule 5123 filing obligation applies to private placements to any individual accredited investor, which includes officers, directors and general partners of the issuer (Rule 510(a)(4)) and entities in which all the equity owners are… Continue Reading
FINRA 5123 Becomes Effective; FINRA Releases FAQs
Posted in Private PlacementsEarlier this week, FINRA Rule 5123 relating to private placements became effective, and FINRA released a set of FAQs (see http://www.finra.org/Industry/Compliance/RegulatoryFilings/PrivatePlacements/FAQ/index.htm) to provide market participants with additional guidance. The FAQs clarify that only private placements that are made to institutional accredited investors are exempt from the filing requirements, while those made to accredited investors that… Continue Reading
A Little History
Posted in Rule 506 RulemakingMany comment letters relating to the SEC’s proposed rules relaxing the ban on general solicitation suggest that the JOBS Act mandate was not well thought through and that relaxing the ban on general solicitation requires careful thought. While it is true that any change that would affect investor protections should require careful thought, it seems… Continue Reading
FINRA Rule 5123 to Become Effective in December
Posted in Private PlacementsWe have previously written about FINRA Rule 5123 (see http://www.mofo.com/files/Uploads/Images/120615-FINRA-Rule-5123.pdf) which will apply to private placements in which a FINRA member firm participates. On September 5th, FINRA announced that the rule will become effective on December 3, 2012 for offerings commencing after such date. See the full notice at http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p163707.pdf FINRA Rule 5123 applies to… Continue Reading
Threat Level Orange
Posted in Crowdfunding, Rule 506 RulemakingThe 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
ABA Task Force Tries Again on “Finder” Issue
Posted in Broker-Dealer RegistrationFor several years, a task force within the Business Law Section of the American Bar Association has tried to get the attention of federal and state regulators to address an issue that comes up from time to time in private placements and even in an occasional public offering. What do you do about a person… Continue Reading
PIPE As Usual
Posted in Rule 506 RulemakingWe’ve been thinking about whether the changes to Rule 506 offerings are likely to have any effect on the PIPE market. Our preliminary conclusion is that the ability to use general solicitation is unlikely to have much effect on PIPE transactions. An already public company generally turns to a PIPE transaction for financing because the… Continue Reading
A Capital Idea
Posted in Rule 506 RulemakingMany smaller banks in the United States recently received a bit of surprising news. The banking agencies published their notices of proposed rulemaking relating to the bank capital requirements. The Basel III NPR made clear that only the smallest banks in the United States would be exempt from compliance with the heightened regulatory capital requirements… Continue Reading
Integration Disintegration?
Posted in Rule 506 RulemakingOne of the thorniest issues for securities lawyers always has been addressing potential integration questions. We have been trained to recognize that there are heightened concerns associated with offerings occurring in close proximity to one another, or changes in offering format (from private to public or public to private offering). Over time, the SEC has… Continue Reading
Trust, and Verify
Posted in Rule 506 RulemakingIn considering the relaxation of the prohibition against general solicitation and general advertising that was incorporated into the JOBS Act, Congressional attention seemed to focus on some quid pro quo arrangement that demands verification of accredited investor status. This leads us to wonder why it takes a “trade” of this sort to justify removing the… Continue Reading
The JOBS Act and Private Funds
Posted in Rule 506 RulemakingSection 201(a)(1) of the JOBS Act directs the SEC to repeal the ban on general solicitation and general advertising in securities offerings under Rule 506 of Regulation D and Rule 144A. Can advertisements for hedge funds in Cigar Aficionado and The Wine Spectator be far behind? Not so fast. The SEC has missed its July 4 deadline… Continue Reading
A Boon for Private Placements
Posted in Rule 506 RulemakingThe JOBS Act was signed into law three months ago today, and much of the excitement thus far has been focused on the IPO on-ramp provisions. However, the most significant, or perhaps most lasting, changes may actually result for the private placement market. Although, on a relative basis, in recent years there have been fewer regulatory… Continue Reading
Title II Rulemaking Set for August 22 Open Meeting
Posted in Rule 506 RulemakingOn the heels of last week’s announcement by Chairman Schapiro that the SEC did not plan to adopt changes to Rule 506 of Regulation D and Rule 144A by the 90-day deadline contemplated in the JOBS Act, the SEC issued a Sunshine Act Notice announcing that the Title II rulemaking will be considered at a Commission Open Meeting… Continue Reading
The Suspense is Over – No JOBS Act Rules Next Week
Posted in Rule 506 RulemakingIf you were holding off on plans for an Independence Day barbeque in anxious anticipation of the SEC rules lifting the ban on general solicitation and general advertising in Rule 506 offerings under Title II of the JOBS Act, you can go ahead and buy the hot dogs and charcoal. As I noted in the… Continue Reading
Whither the Title II Rulemaking?
Posted in Rule 506 RulemakingTitle II of the JOBS Act directs the SEC to revise Rule 506 of Regulation D to provide that the prohibitions against general solicitation or general advertising in Rule 502(c) do not apply to offers and sales of securities made pursuant to Rule 506, provided that all purchasers of the securities are accredited investors. The… Continue Reading