Securities Law Exchange

SECURITIES LAW AND PUBLIC COMPANY ADVISORY

The American Law Institute (ALI) approved a new project last month – Restatement of the Law, Corporate Governance. Over 25 years ago, the ALI approved and published the Principles of Law, Corporate Governance and this new project will examine the evolution of corporate governance over the last 25 years and reflect the current state of the law. New York University Law School Professor Edward Rock will serve as the Reporter for the Restatement, assisted by…
In response to the mandate of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the Securities and Exchange Commission recently issued final rule amendments permitting companies reporting under Section 13 or 15(d) of the Securities Exchange Act to offer securities pursuant to the registration exemption Regulation A. Previously, offerings pursuant to Regulation A were expressly limited to non-reporting companies. The rule amendments also provide that, so long as the reporting company is current in…
An SEC comment letter exchange recently made public serves as a helpful reminder to consider Section 5 of the Securities Act when structuring a PIPE (private investments in public equity) transaction.  In a PIPE, a public company issues securities to one or more accredited investors in a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, or the safe harbor thereunder provided by Regulation D.  Since the securities in…
With the government partially shut down, the SEC is following its operations plan during a shutdown, which entails an extremely limited number of staff members available to respond to emergency situations involving market integrity and investor protection, including law enforcement.  While EDGAR will accept registration statements, offering statements and other filings during the shutdown, the SEC is neither screening nor reviewing filings during the shutdown.  This means the Staff is not be able to declare…
On December 19, 2018, the Delaware Chancery Court held that a business incorporated in Delaware could not use its corporate charter or bylaws to require that its shareholders bring any securities claims under the Securities Act of 1933 (the “1933 Act”) in federal court.  The 1933 Act requires that any person selling or offering securities make certain disclosures through a registration statement approved by the Securities and Exchange Commission and provides a private right of…
On December 18, 2018, the SEC issued a request for public comment soliciting input on the nature, content and timing of earnings releases and quarterly reports of companies that are obligated to file reports with the SEC as well as the relationship between the periodic reports that reporting companies must provide and the earnings releases that they choose to distribute. With this request for comment, the SEC is seeking to continue the ongoing dialogue about…
Generally speaking, the federal securities laws were drafted with the purpose of limiting the kind and amount of pre-offering publicity permitted in registered public offerings. Pursuant to Section 5(c) of the Securities Act of 1933, it is unlawful to offer to sell or offer to buy any security unless a registration statement has been filed. The term “offer” is defined and interpreted very broadly, with the effect that any pre-filing publicity constitutes gun jumping if…
Although the life of a securities lawyer can be routine and mechanical at times, it doesn’t always have to be this way!  Last year, around this time, my wife Missy saw on Facebook that the Property Brothers: Buying and Selling television show (an HGTV show for those not familiar) was going to be filming in Nashville during the summer, and the post invited those interested in being on the show to submit an application.  Our…
As equity valuations of public companies remain high in comparison to recent historical norms, the use of public company stock as an acquisition currency by SEC registrants in acquisitions of private companies will continue, particularly if interest rates continue to rise, thus increasing the costs associated with leveraged transactions. This blog explores legal considerations associated with the issuance of stock by a public company in connection with its acquisition of a private company.…
In monitoring SEC comment letters, we came across this SEC comment letter recently made public.  While we acknowledge the term “pro forma” is often used by registrants when adjusting their GAAP results to provide additional meaningful information to investors, this comment by the Staff serves as a reminder to registrants that the Staff generally dislikes non-GAAP measures titled as “pro forma” when the information is not presented in compliance with the pro forma rules in…