Business Startup

iVLG News Roundup 2012 Weeks 19 & 20: Corporate Governance; IPO’s; Arbitration Clauses; Venture Capital

Corporate Governance

CEO Resigns After Erroneous Academic Credentials Discovered Yahoo CEO Scott Thompson stepped down after admitting that he misstated his academic credentials. His resume reported that he had degrees in both accounting and computer science, however he has no degree in computer sciences. The misstated credentials were discovered by Dan Loeb, a manager of Third Point, a New York hedge fund that owns 6% of Yahoo’s outstanding stock. Third Point, had been contending that Yahoo was being mismanaged, and was attempting to get three of its nominees elected to the Yahoo board of directors. Apparently Yahoo did not use a background checking firm in its process of appointing a new executive officer. In the fallout from Mr. Thompson’s resignation, the board...

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Business Startup

News Roundup 2012 Week 18: CEO salaries, Slow U.S. job growth, Facebook IPO valuation, United-Boeing deal

Executive Pay Packages Soar

GMI Ratings’ recent report details second consecutive year of double digit pay increases GMI Ratings released their 2012 Preliminary CEO Pay Survey that examines pay changes in the Russell Index and the S&P Index. The survey provides a look into the ten highest paid CEOs of 2012 and examines the executive pay packages. Some important highlights from the survey include a second consecutive year of double digit compensation increases at both the median and average level for the Russell 3000, with a median increase of about 15%. Three of the ten highest paid CEOs in 2012 are from the software industry. The highest paid CEO so far is Herbalife CEO Michael Johnson, earning nearly $90 million thus far....

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Business Startup

News Roundup 2012 Week 17: CROWDFUND Act, Terms of Use, & CISPA

CROWDFUND Act

SEC Reiterates: Crowdfunding Not Legal Yet The SEC issued an official comment emphasizing that crowdfunding is not yet legal. The JOBS Act has passed, and it makes crowdfunding legal, but not until the SEC issues a number of rules proscribed by the legislation. Congress wrote into the bill that the SEC had 270 days to promulgate these proscribed rules. The SEC’s statement reads:

“On April 5, 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law. The Act requires the Commission to adopt rules to implement a new exemption that will allow crowdfunding. Until then, we are reminding issuers that any offers or sales of securities purporting to rely on the crowdfunding exemption would be unlawful under the federal...

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Business Startup

News Roundup 2012 Week 16: Securities Law, Corporate Governance, JOBS Act, Corporate Finance, Etc.

Securities Transactions & Corporate Governance

Google Stock Split Preserves Founder Control Google’s stock split that was announced last Friday created a new class of non-voting stock. Google’s stock structure provides for 66% of the voting power to be concentrated in the hands of three individuals: the company’s two co-founders, Larry Page and Sergey Brin, and the Executive Chairman, Eric Schmidt. By creating the class of non-voting stock, and distributing this stock in the stock split, the controlling shareholders will avoid having their voting rights diluted. Other web companies such as Zynga, Facebook, and Groupon have implemented a similar stock structure, which allows for visionary company leaders to maintain company control. The drawback is that others, including investors and employees, have relatively fewer votes....

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Business Startup

News Roundup Week 15: Crowdfunding & the SEC, Copyright & the DMCA, Mergers & Acquisitions, etc.

CROWDFUND Act & Securities Law

SEC Seeks Feedback On JOBS Act The SEC announced on Wednesday that it is seeking feedback on the changes that will be forthcoming under the JOBS Act.  The JOBS Act makes it easier for companies, smaller companies in particular, to raise money through the sale of equity. In the JOBS Act, Congress left much of the heavy lifting to the SEC. For example, the portion of the bill that requires crowd funding websites to protect consumers states “intermediareies shall take such measures to reduce the risk of fraud with respect to such transactions, as established by the Commission (the SEC), by Rule.” Because important aspects of this bill have been left to the SEC, it will be...

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Business Startup

News Roundup 2012 Week 14: Crowdfunding, Privacy Policies, Regional News, etc.

JOBS Act – Securities Law

Obama Signs JOBS Act Yesterday Obama signed the JOBS Act into law. The President called the JOBS Act, “potential game changer” for small businesses. The JOBS Act eases federal regulation on the sales of securities, making it easier for companies to raise capital. Part of the JOBS Act is the CROWDFUND Act which enables companies to raise money by selling stock online.

Privacy Policies & Mobile Technology

Phone Companies Cashing in on Tracking Capabilities According to a New York Times article this week, cell phone companies are profiting from the sales of tracking data to law enforcement agencies. While warrants are required for phone taps, and data logs, police have been able to acquire tracking data without warrants. When AT&T...

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Business Startup

News Roundup Week 13: The JOBS Bill, Securities Law, Employment Law, Social Media Law, etc.

The JOBS Bill & Securities Laws

Senate and House Approve Major Overhauls of Federal Securities Law This week the house and senate JOBS bills were reconciled and H.R. 3606 was sent to the president to be signed into law. The White House has publicly supported the bill, and is expected to sign the bill soon. The 22 page bill has seven different titles, each of which is intended to make it easier for companies to raise money.

Title I “Reopening American Capital Markets to Emerging Growth Companies” creates reduced reporting obligations for “emerging growth companies,” a newly defined classification of businesses. These reduced filing and reporting obligations mean that only the largest companies will have to fully comply with the burdensome filing and...

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Business Startup

News Roundup 2012 Week 12: Corporate Finance, Int’l Trade & Clean Energy, Corporate Governance, Social Media & Employment Law

Corporate Finance & Securities Regulation

Senate JOBS Act Passes Key Hurdle Today the Senate voted 76-22  to pass a cloture motion (a motion to end debate) on the JOBS (Jumpstart Our Business Startups) Act. This controversial legislation would enable businesses to raise money through crowdfunding, and would reduce other restrictions on raising capital. The Wall Street Journal, and the Chicago Tribune support the JOBS Act, but others including the New York Times and the Securities Exchange Commission have spoken against the bill. One the one hand, the Journal and the Tribune are taking the position that the bill should be passed because it will boost the economy, and on the other, the Times and the SEC are concerned that without appropriate regulation the...

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Business Startup

News Roundup 2012 Week 11: Securities Law, Employment Law, Executive Compensation

Securities Law

SEC Cracks Down on Sales of Private Securities The Securities and Exchange Commission has filed civil charges against three brokerage firms, Felix Investments, EB Financial, and SharesPost, that trade shares of privately held technology securities. According to the SEC, fund managers at Felix and EB Financial misled investors and took undisclosed fees and commissions. SharesPost, an online exchange for private shares, reportedly brokered transactions and failed to register as a broker-dealer. EB Financial settled for about $310,000, and SharesPost and its founder will pay about $100,000 combined. Meanwhile the SEC is progressing with a lawsuit against Felix and its manager. US legislators are considering adopting new laws that would make it easier to trade shares on the secondary markets.

Employment Law

CA...

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Business Startup

News Roundup 2012 Week Ten: Mergers & Acquisitions, Executive Compensation, Venture Capital, etc.

Mergers & Acquisitions

Nation’s Third Largest Proxy Advisor Withdraws Support of El-Paso Acquisition In last week’s news roundup we wrote about the Kinder Morgan Acquisition of the El-Paso Corporation, noting that Delaware judge Leo Strine begrudgingly refused to issue a preliminary injunction, which would have enjoined a shareholder vote on the matter. Now, Egan Jones Proxy Services, the nation’s third largest proxy adviser, has reversed its position on the sale. Previously Egan Jones was recommending that shareholders approve the acquisition, but after Chancellor Strine’s opinion, which noted Goldman Sach’s conflict of interest in the deal, Egan Jones is recommending that shareholders vote against the acquisition. However, the nation’s two largest proxy services continue to recommend to shareholders that they vote in favor of the acquisition.

Update: Calstrs...

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