Category: Securities Act Compliance

SEC Charges CEO with Failing to Disclose Perks to Shareholders

Executive Compensation and Disclosure / Securities Act Compliance

1 Jun, 2017

SEC Charges CEO with Failing to Disclose Perks to Shareholders

Companies frequently wrestle with perks in their proxy executive compensation disclosure. Whether an item constitutes a perk often requires judgment based on the facts and circumstances,¹ and disclosure may elicit intense, public scrutiny over what amounts to a relatively small percentage of an executive’s total compensation package.² From time to time, the SEC issues a cautionary tale that perks need to be accounted for and reported...

SEC Issues Final Rules to Make JOBS Act Inflation Adjustments and Amendments to Forms and Rules to Accommodate Emerging Growth Companies

Exchange Act Reporting and Disclosure Effectiveness / SEC Rulemaking / Securities Act Compliance

11 Apr, 2017

SEC Issues Final Rules to Make JOBS Act Inflation Adjustments and Amendments to Forms and Rules to Accommodate Emerging Growth Companies

On March 31, 2017, the Securities and Exchange Commission (SEC) issued final rules regarding inflation adjustments and other technical amendments under Title I and III of the Jumpstart Our Business Startups (JOBS) Act. Under the inflation adjustments, the SEC adjusted the gross revenue threshold for an issuer to lose its status as an Emerging Growth Company (EGC) from $1.0 billion to $1.07 billion, a $70...

The Danger of Paying Finder’s Fees to Unregistered Broker-Dealers

Ethics and Compliance / SEC Enforcement / Securities Act Compliance

29 Mar, 2017

The Danger of Paying Finder’s Fees to Unregistered Broker-Dealers

We get asked from time-to-time whether it is advisable for issuers to pay fees to unregistered “finders” for introducing potential investors in the United States to the issuer in connection with securities offerings. The short answer is “no.” Most finders are engaged by issuers under finder’s, advisory, or other arrangements, which typically require payment of “success fees” upon completion of a financing transaction. While these...

SEC Adopts T+2 Settlement Cycle

SEC Rulemaking / Securities Act Compliance

24 Mar, 2017

SEC Adopts T+2 Settlement Cycle

On March 22, 2017, the Securities and Exchange Commission adopted an amendment to Rule 15c6-1(a) to shorten by one business day the standard settlement cycle for most broker-dealer securities transactions.  Currently, the standard settlement cycle for these transactions is three business days, known as T+3.  The amended rule shortens the settlement cycle to two business days, T+2. The amended rule will take effect on September...

Senate Banking Committee Focused on Deregulation

Equity Compensation / Legislative Actions / Securities Act Compliance

17 Mar, 2017

Senate Banking Committee Focused on Deregulation

On March 9, 2017, the Senate Banking Committee passed a series of four bills focused on deregulation, including one that would make it easier for privately held companies to issue stock awards through equity compensation plans. Each of the bills was a bipartisan effort. One bill eases certain restrictions on reporting on exchange traded funds (ETFs). The bill would address securities laws and regulations that...

SEC Endorses Use of Conditional Offers to Buy Shares in IPOs

SEC Rulemaking / Securities Act Compliance

16 Dec, 2016

SEC Endorses Use of Conditional Offers to Buy Shares in IPOs

The SEC recently issued a no-action letter to Morgan Stanley that will streamline the process for its wealth management clients to participate in IPOs. The SEC said it would not object to Morgan Stanley’s proposed use of conditional offers to buy shares (“COBs”) prior to the effectiveness of IPO registration statements under specific conditions. The no-action request and the SEC’s letter confirm that COBs, if...

Guidance Provided by SEC on Abbreviated Debt Tender Offers

SEC Rulemaking / Securities Act Compliance

2 Dec, 2016

Guidance Provided by SEC on Abbreviated Debt Tender Offers

On November 18, 2016, the SEC’s Division of Corporation Finance issued a set of compliance and disclosure interpretations (“C&DIs”) pertaining to abbreviated debt tender offers, which were the subject of an SEC no-action letter in early 2015. The new C&DIs offer important clarifications regarding abbreviated debt tender offers and the previous no-action letter guidance. Read more in our full summary here: https://www.dorsey.com/newsresources/publications/client-alerts/2016/11/guidance-provided-by-sec

SEC Allows Companies to Conduct a Generally Solicited Securities Offering Immediately Following a Privately-Solicited Offering

SEC Rulemaking / Securities Act Compliance

18 Nov, 2016

SEC Allows Companies to Conduct a Generally Solicited Securities Offering Immediately Following a Privately-Solicited Offering

On November 17, 2016, the SEC issued a new interpretation stating that a company may conduct a generally solicited offering of securities under Rule 506(c) immediately following a completed securities offering made in reliance upon Rule 506(b), without invalidating the prior offering.  The SEC’s new interpretation will give companies more flexibility in their financing plans, allowing them to potentially take advantage of the best of...

SEC Clarifies Baby Shelf Rules

Securities Act Compliance

9 Nov, 2016

SEC Clarifies Baby Shelf Rules

The Securities and Exchange Commission (“SEC”) recently issued a new compliance and disclosure interpretation (the “New C&DI”) in Question 116.25 regarding the availability of Form S-3 for the registration and sale of shares by companies with public float less than $75 million. Instruction I.B.6(a) to Form S-3 states that if a registrant has a public float of less than $75 million, the registrant may only...

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This blog, published by the attorneys of Dorsey & Whitney LLP’s Corporate Governance & Compliance Practice Group, tracks the latest developments, trends and best practices in compliance, corporate governance, and disclosure.

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Cam C. HoangCam C. Hoang

Cam helps clients with corporate matters including governance and...

Jason BrenkertJason Brenkert

Jason assists clients in raising funds through capital mar...

Kimberley R. AndersonKimberley R. Anderson

Kimberley helps clients achieve key business goals through securi...

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This blog is not legal advice, but contains general information not applicable to specific matters. We are not acting as your legal counsel unless separately retained in a written agreement signed by us.