Securities Regulation
Consumer advocacy group urges SEC to reconsider rules lifting ban on general solicitation
Consumer Federation of America submitted a comment letter to the SEC expressing its, “strong opposition to the Commission’s proposed rule to lift the ban on general solicitation and advertising in private offerings.” On August 29th, the SEC issued proposed rules which would implement Title II of the JOBS Act, allowing companies issuing securities pursuant to Rule 506 to utilize general solicitation under certain conditions. The Consumer Federation of America identified a number of substantive and procedural concerns, including:
- That the standard for “reasonable steps to verify” was too broad to allow for protection of consumers;
- That the accredited investor standard doesn’t capture investor sophistication–basically the concern is that accredited investors can be defrauded if they are not sophisticated, yet no sophistication requirement is in place; and
- That the SEC failed to request comment on alternative regulatory approaches, which the consumer group argues is a violation of regulations and the Commission’s own guidelines.
Mergers & Acquisitions
Stanley Black & Decker to sell hardware and home improvement division for $1.4 billion
In a reminder that even successful companies sell off valuable assets, Stanley Black & Decker is selling its hardware and home improvement unit for $1.4 billion in cash to Spectrum Brands Holdings. Stanley Black & Decker is searching for opportunities to expand internationally, and will use the proceeds from the sale to purchase Infastech, a specialty fastener company that generates more than half of its revenue in the Asian-Pacific region.
Initial Public Offerings
Workday increases price range for upcoming I.P.O.
Workday, a maker of cloud-based human resources software, announced that it is raising its I.P.O. price range from $21-$24 to $24-$26. This is positive news for what has been a relatively disappointing I.P.O. market in recent weeks. Last week Dave & Buster’s scrapped its I.P.O., while LifeLock and Berry Plastics Group dropped 9% and 5% respectively in their first week of trading. The Workday offering is being led by Morgan Stanley and Goldman Sachs, and is expected to begin trading on the New York Stock Exchange on Friday.
