Brian Hirshberg

Latest Articles

A pre-funded warrant allows its holder to purchase the issuer’s securities at a nominal exercise price (typically, $0.01 per share).  Instead of waiting to receive proceeds following a warrant’s exercise, the issuer receives substantially all of the warrant’s proceeds upfront (without any conditions) as part of the warrant’s purchase price.  In our recently published On point. we provide a comprehensive overview of pre-funded warrants, including certain advantages for issuers and holders, as well as…
On November 30, 2018, the Securities and Exchange Commission (the “Commission”) adopted a new rule establishing a non-exclusive research report safe harbor (“Rule 139b”) for unaffiliated brokers or dealers that publish or distribute research reports regarding qualifying investment funds.  The Commission took this action in furtherance of the mandate of the Fair Access to Investment Research Act of 2017 (the “FAIR Act”).  The FAIR Act required that the Commission expand the Rule 139 safe harbor…
On October 12, 2018, the Securities and Exchange Commission’s Division of Investment Management issued a no-action letter permitting a fund’s board of directors (“Board”) to rely upon quarterly compliance certifications from the fund’s chief compliance officer (“CCO”) that address the fund’s compliance when the fund is engaging in certain affiliate transactions under the Investment Company Act of 1940, as amended (the “1940 Act”), instead of requiring the Board to itself determine compliance.  Funds permitted to…
An at-the-market (ATM) offering is an offering of an issuer’s securities into the existing trading market for such securities at publicly available bid prices. An issuer’s internal legal team and outside counsel play critical roles in properly documenting an ATM offering. In this Lexis Top 10 Practice Tips: At-The-Market Offerings, we provide 10 practice tips that can help attorneys effectively and efficiently assist with an ATM offering.…
On September 6, 2018, House Committee on Financial Services Chairman Jeb Hensarling and Representative John Delaney released a discussion draft of the Bipartisan Housing Finance Reform Act (the “Act”).  The Act would require eligible private credit enhancers (as approved by the Federal Housing Finance Agency, “PCEs”) to engage in approved credit risk transfer transactions.  PCEs would be new entities in the secondary mortgage market that would be required to provide eligible private insurance for conventional…
On May 30, 2018, the Division of Investment Management of the Securities and Exchange Commission issued an exemptive order that permits private business development companies (“BDCs”) to conduct an exchange offer pursuant to which BDC investors, including directors and officers of the BDC, may elect to exchange their BDC shares for shares in a new split-off extension fund.  The new split-off extension fund would receive a pro rata portion of the BDC’s assets and liabilities,…
On May 23, 2018, the Securities and Exchange Commission (the “Commission”) proposed establishing a research report safe harbor (Rule 139b) for unaffiliated brokers or dealers that publish or distribute research reports that cover investment funds.  The Commission took this action in furtherance of the mandate of the Fair Access to Investment Research Act of 2017 (the “FAIR Act”).  The FAIR Act required the Commission to expand the Rule 139 safe harbor for research reports to…
Effective May 11, 2018, the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”) implemented a new customer due diligence requirement.  The requirement applies to certain financial institutions, including banks, broker-dealers and mutual funds, at the time each new account is opened.  The rule enhances the information that financial institutions must collect regarding the identity of individuals (i.e., beneficial owners) who own or control their legal entity customers, which includes any corporation, limited liability company or partnership. …
On January 1, 2018, a European Union law regulating packaged retail insurance-based investment products (“PRIIPs”) went into effect targeting securities offered to retail investors by investment funds.  If a security is considered a PRIIP, the issuer is required to publish a strictly regulated key information document (“KID”) that must be continuously updated during the distribution of the security.  The liability for the content of the KID is assumed by the issuer by operation of law. …
Nasdaq Inc. plans to propose a rule to the Securities and Exchange Commission (SEC) that, if adopted, would allow stock exchanges (such as Nasdaq Inc. and the New York Stock Exchange) to provide smaller public companies with the option of limiting the trading of their listed securities to a single stock exchange.  Presently, numerous secondary stock exchanges facilitate trading in public company securities even though the securities are separately listed on the company’s primary stock…