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Search Results for: sec

Initial Coin Offerings in SEC Spotlight

In recent statements, SEC Chairman Jay Clayton has made it clear that regulating initial coin offerings will be a priority for the SEC.

  Kyle Hulten This month, Telegram reported raising $850,000,000 in a cryptocurrency offering. As companies like Telegram are demonstrating, initial coin offerings (sometimes called ICOs) are a viable way to raise capital. As ICOs become increasingly common, the SEC is prioritizing its regulation of those offerings....

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Intrastate Securities Offerings Under 3(a)(11) and Rule 147 & 147a

Today’s post highlights the federal securities law exemption for intrastate securities offerings made pursuant to rule 3(a)(11) and rules 147 and 147a.

  Gavin Johnson As we’ve discussed previously, the Securities and Exchange Commission (SEC) is the governmental body responsible for the regulation and enforcement of federal securities laws that govern both interstate securities offerings and intrastate securities offerings....

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Integration in Securities Offerings

Today's post discusses the concept of securities offering "integration" or "integrated transactions" in securities law and startup law.

  Gavin Johnson

When companies raise money from investors, the transaction will be governed by securities laws. These securities laws have complex requirements that often “trip up” companies unfamiliar with the rules and their application. In today’s post, we tackle one of those areas of securities and startup law where companies often trip up: integration.

What is “Integration” in the context of a securities offering?

To better understand integration, you’ll need to first understand what a “securities offering” is. In very simple terms, a securities offering is a transaction where a company is offering to sell a security in exchange for (in most cases) cash. You can check out a discussion of the more precise definition of a security in our prior post.

Integration is a term in...

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Five Key Securities Issues in Due Diligence of M&A Deals

This post discusses five key securities-related issues for merger and acquisition transactions.

  Kyle Hulten

In business acquisitions, and especially in business acquisitions structured as stock purchases, there are a number of securities issues you’ll want to be on the lookout for. For the purposes of this post, you can think of a security as the stock or other equity interest in a company like an option or warrant. (You can check out this post for a more detailed discussion of what a security is.) Below I’ve listed 5 key securities-related due diligence issues for you to consider when purchasing a business.

We’ll start with the two key issues that are important for acquisitions of both stock and assets; we’ll finish with three key issues that primarily affect stock acquisitions:

Issues for acquisitions of either stock or assets

Two issues are of...

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Securities Law: An Overview of Regulation A+

Regulation A+ is a new way for companies to raise money from investors. In this post we discuss Reg A+ and compare it to other options for raising capital.

  Kyle Hulten Regulation A+ is a new way for companies to raise money from investors. In this post we discuss Reg A+ and compare it to other options for raising capital....

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Amendment to Stock Legend Guidance for Restricted Securities

The Securities Division of Washington's Department of Financial Institutions adopted amendments to WAC 460-44A-502 to provide stock legend guidance for restricted securities.

  Collin Roberts

Recently, the Securities Division of Washington’s Department of Financial Institutions  adopted amendments to WAC 460-44A-502 to provide stock legend guidance for restricted securities.

The adopted amendments remove a reference to an outdated North American Securities Administrators Association (“NASAA”) guideline and instead provide the suggested language for the legends in the text itself. A “legend” on a stock certificate is a statement noting restrictions on the transfer of the stock, often due to SEC and state requirements for unregistered securities.

The new suggested legend language in Washington state is as follows:

(d) A written disclosure or legend will be deemed to comply with the provisions of WAC 460-44A-502 (4)(b) or (c) if it states:

“(i) These securities have not been registered under the Securities Act of...

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Investment Club: Securities Laws

Raising capital is a costly endeavor and it requires compliance with securities laws. One alternative is to put together an investment club.

  Collin Roberts

Raising capital is a costly endeavor and it requires compliance with securities laws. But people who want to pool their funds to help businesses grow have some options to avoid being subject to more restrictive securities requirements. One option is to put together an investment club.

What is an investment club?

Investment clubs are groups of people who pool their money together to make investments. Members of investments clubs study different types of investments and then the group decides to buy or sell based on a majority vote of the members. The meetings of members may be educational and each member must actively participate in investment decisions. Often, investment clubs are set up as partnerships.

What’s the role of the SEC?

Investment clubs...

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SEC Form D Amendments

Companies and funds raising capital must file their Form D amendments with the SEC online using the SEC's EDGAR filing system.

  Collin Roberts

When a company decides to raise capital, the company must file Form D giving notice of an exempt offering of securities with the Securities and Exchange Commission. Commission rules require the notice to be filed by companies and funds that have sold securities without registration under the Securities Act of 1933 in an offering based on a claim of exemption under Rule 504, 505 or 506 of Regulation D or Section 4(5) of that statute.

Companies and funds must file their Form D amendments with the SEC online using the SEC’s EDGAR (electronic gathering, analysis and retrieval) system. One question that often arises is this: when is a person or company required to file Form D amendments?

Form D Amendments Filing

A Form D filer should...

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When is a loan subject to securities regulations?

In this blog post we look at when loans may be subject to securities regulations and why business owners should care.

  Kyle Hulten Background

What is a security? Securities are contracts for an interest in a company, sometimes called an “investment contract.” A typical example of a security transaction is the sale of company stock in exchange for cash. The SEC’s definition of “security” includes a 30-item list that stocks, notes, bonds, and investment contracts, among others. We recently discussed the Howey case, which provides the test courts use when determining whether something is an investment contract. Today’s post looks into the circumstances under which a note or loan would fall within the SEC’s definition of a security.

To start: Why does it matter if something’s a security? Securities are extensively regulated because of the real risk that individuals and the companies they control could swindle unwitting...

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