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On June 8, 2017, the U.S. House of Representatives, by a vote mostly along party lines, approved a bill that would repeal many of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) requirements and significantly reduce the regulatory burden for financial institutions. If enacted in its current form, the Financial CHOICE Act of 2017 (the “CHOICE Act”) would also alter the regulatory landscape for business development companies (“BDCs”), investment companies and investment advisers. Among…
On June 8, 2017, the U.S. House of Representatives, by a vote mostly along party lines, approved a bill that would repeal many of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) requirements and significantly reduce the regulatory burden for financial institutions. If enacted in its current form, the Financial CHOICE Act of 2017 (the “CHOICE Act”) would also alter the regulatory landscape for business development companies (“BDCs”), investment companies and investment advisers. Among…
On November 3, 2016, the Second Circuit upheld the district court’s ruling involving the Facebook IPO that underwriters of the IPO are not required to disgorge short-swing profits made with their sales and purchases of shares in connection with the offering. Section 16(b) of the Securities Exchange Act of 1934 provides for the recovery by the issuer, in an action brought by the issuer or by a security holder of the issuer, of profits gained…
On November 1, 2016, the SEC issued a no-action letter with respect to the required Rule 144 holding period after the exchange of partnership interests in an umbrella operating partnership (OP units) into shares of its parent corporation (Corporation shares) in an up-C structure (see our prior post and Practice Pointers on up-Cs). Rule 144 lists the conditions under which restricted and control securities may qualify for public resale under a safe harbor exemption from…
As privately held companies choose to remain private longer and defer their initial public offerings (IPOs), these companies are increasingly reliant on raising capital in successive private placements. For companies in the life sciences sector, for instance, a late-stage private (or mezzanine) placement made to known and well-regarded life science investors may serve to validate the company’s technology. We have compiled data on late-stage private placements in the life sciences sector. Read our Life Sciences
According to news reports, the Massachusetts Securities Division (the “Division”) recently sent a “sweep letter” to firms asking broker-dealers to report information about their hiring policies and procedures. The Division, led by Secretary of the Commonwealth William Galvin, sent this letter to firms in which more than 15% of their representatives have at least one current misconduct report on their records; this figure is said to be above the average for Massachusetts-registered broker-dealers. These 241…
The SEC recently approved FINRA’s new Rule 2273 (Educational Communication Related to Recruitment Practices and Account Transfers), which requires delivery of an educational communication prepared by FINRA to customers of a transferring representative.  The rule will become effective on November 11, 2016. On May 16, 2016, FINRA released Regulatory Notice 16-18, which provides an overview of the new Educational Communication Rule and includes the rule text and the form of educational communication required by…