William Smith and Palm Beach Atlantic Financial Group Charged by SEC

On December 11, 2019, Palm Beach Atlantic Financial Group, LLC and its managing member and sole owner, William A. Smith, were charged by the Securities and Exchange Commission (SEC) “with engaging in the fraudulent offer and sale of… Read More

SEC: Crypto Founder Used ICO Funds for Dating and Rent

Eran Eyal was charged by the SEC this week for selling unregistered securities and improperly using the funds that he raised. Through his Initial Coin Offering (ICO), Eyal and his company UnitedData, using the name Shopin Tokens, raised… Read More

Two Class Action Lawsuits Filed Against CBD Brands

In our previous blog post, we wrote about the FDA’s recent releases detailing how they were unwilling to label CBD as a safe dietary supplement. In response to the FDA’s decision, two class action lawsuits have been filed… Read More

FDA Warns that CBD “has the potential to harm you”

The FDA released a statement this week detailing how it has warned fifteen different companies for illegally selling products containing cannibidiol (CBD), and the agency addressed safety concerns it has regarding this newly popular ingredient. The violations include… Read More

FINRA Rule 6490 – FINRA Compliance and Rule 6490 Lawyers

Though FINRA’s principal mandate is to regulate broker-dealers, historically it has always exercised some oversight of the over-the-counter markets including all tiers of the OTC Markets. Part of that oversight involves processing corporate action requests from issuers of… Read More

SEC Charges Rishi Shah, Shradha Agarwal,  Brad Purdy, Ashik Desai,and Outcome Health

  On November 25, 2019, the Securities and Exchange Commission amended a complaint to charge four former executives of Outcome Health, a private healthcare advertising company, with fraud in raising nearly half a billion dollars by falsely portraying… Read More

Non-Traditional IPO: Direct Listing Process (DLP)

A new type of IPO has gained prevalence recently, as big tech companies such as Slack and Spotify have decided to take their companies public via a Direct Listing Process (DLP), also known as a Direct Placement, or… Read More

Knightsbridge Private Partners Accused of Selling Fake Shares of Stock

Knightsbridge Private Partners, a New York firm, has been accused of making over $2 million from October 2018 to January 2019 by selling fake shares of stock in pre-IPO companies. They offered “pre-IPO” shares of Uber, Airbnb, and… Read More

Supreme Court Adds Securities Law Case against Charles Liu and Xin Wang to Merits Docket

The Supreme Court this week agreed to hear the case of Liu vs. Securities and Exchange Commission. The issue at hand is “Whether the Securities and Exchange Commission may seek and obtain disgorgement from a court as “equitable relief”… Read More

SEC Invites Outsiders to Submit Proposals for Secondary Market

Seeking to improve the secondary market structure for “thinly traded securities”, the SEC has outsourced the creative process to anyone involved in this market who may have some good ideas. The SEC’s press release “invites exchanges and other… Read More

Regulation A + l Rule 506 l Form S-1 Comparison

Rule 506 and Regulation A provide smaller companies with a flexible alternative to raising capital and going public in connection with direct public offering (DPO) and/or traditional initial public offering (IPO).  

USDA Releases Draft of Interim Final Rule on Hempmaking

On December 20, 2018, the 2018 Farm Bill was signed into law by the federal government. The 2018 Farm Bill “requires USDA to promulgate regulations and guidelines to establish and administer a program for the production of hemp… Read More

Regulation A Direct Listing: Regulation A Tier 2 Requirements

An increasing number of small companies seeking public company status are using Tier 2 of Regulation A in their going public transaction.  This process is sometimes referred to as a Regulation A direct listing. Regulation A provides many… Read More

Recent Court Dissent Shows Progress for Marijuana Companies

Currently, although many states have legalized marijuana, it is still illegal to sell the drug under federal law. Because of this, under tax code Section 280E, cannabis companies are not allowed to make any deductions in their filings… Read More

Does Regulation A+ Allow Testing the Waters?

Issuers utilizing Regulation A+ are permitted to “test the waters” with potential purchaser and use solicitation materials both before and after the offering statement is filed, subject to compliance with SEC rules on filing and disclaimers.  Using Regulation… Read More

Finra Investigates BNP Paribas

On October 24, 2019, the Financial Industry Regulatory Authority (FINRA) announced a settled enforcement action involving BNP Paribas Securities Corp. and BNP Paribas Prime Brokerage, Inc.  A lengthy FINRA investigation found that although the firms did a brisk… Read More

What is Corporate Hijacking?

Corporate hijackings, also known as corporate identity theft, of public shell companies has been around for more than a decade. Corporate hijackings often involve fraudulent state custodianship and/or receivership proceedings disguised to appear legitimate. 

Does Offering Integration Apply in a Regulation A Offering?

The Regulation A + offering integration rules prevent companies from improperly avoiding the SEC’s  registration statement requirements by dividing a single securities offering into multiple securities offerings to take advantage of exemptions that would not be available for the combined offerings. Regulation… Read More

Regulation A+ For Publicly Traded Reporting Companies

Benefits of Regulation A+ Amendments On December 19, 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments to Regulation A informally referred to as Regulation A+. The amendment allows companies that are subject to SEC reporting requirements under… Read More

SEC Halts Alleged $1.7 Billion Unregistered Token Offering

Beginning in January 2018, Telegram Group Inc. and its wholly-owned subsidiary TON issuer began raising capital to finance their business. This included development of their own blockchain and mobile messaging application. According to the SEC, “Defendants sold approximately… Read More

Nasdaq’s Regulation A Seasoning Requirement

Posted by Brenda HamiltonNasdaq’s Regulation A Proposal The Nasdaq Stock Market LLC (“Nasdaq”) proposed a rule that would impose listing requirements for Regulation A companies pursuant to pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934… Read More

Regulation A+ Tier 2 Reporting Obligations – Going Public Lawyer

Regulation A, also known as Regulation A+, provides investors with more investment choices and issuers with more capital raising options during their going public transactions. The rules adopting Regulation A+ are mandated by Title IV of the Jumpstart… Read More

Rule 506(b) Offerings

Rule 506(b) Offerings – Regulation D Offerings Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) exempts from SEC registration, transactions by an issuer not involving a public offering. Rule 506(b) of Regulation D of… Read More

Regulation A+ 2019 Q&A – Securities Lawyer 101

Regulation A provides an  exemption from registration that can be used in combination with a Rule 506 private placement, a direct public offering and/or initial public offering by a private company or company seeking to go public. Since Regulation A was… Read More

The 3(a)(10) Exemption from SEC Registration

Securities Lawyer 101 Blog Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”) exempts the offer and sale of securities in certain exchange transactions from the registration statement requirements. In SEC Legal Bulletin 3A, the Securities and… Read More

Rule 506(c) Offerings: Everything You Need to Know

Issuers can advertise their securities offerings under Rule 506(c) of Regulation D. Upon its implementation in 2013, Rule 506(c) removed the 80-year prohibition against the general solicitation and advertising of private placements.

Regulation A Offerings – Blue Sky Requirements

Regulation A, also known as Regulation A +, provides an exemption from registration for sales of up to $50 million in a 12 month period. The exemption provided by Regulation A + offers numerous benefits to issuers seeking… Read More

Regulation A Investor Bulletin Issued by SEC

In April of this year, NASDAQ submitted a proposal related to the Regulation A Offering Exemption which would require any Company listing on NASDAQ in connection with an offering under Tier 2 of Regulation A.

SEC Updates PAUSE List of Firms Using Inaccurate Information

The SEC has updated its PAUSE list (Public Alert: Unregistered Soliciting Entities), “adding 23 soliciting entities, two impersonators of genuine firms, and 12 bogus regulators.” This is a great resource for investors, as it will help you to… Read More

Our Comment to the SEC Regarding Rule 211 (15c2-11) – Sponsoring Market Makers

Blue Sky, Form 211, Regulation A, Regulation A Secondary Sales, Regulation A Tier 2, Regulation A+. Tier 1, Reporting Company, Rule 15c2-11, SEC Reporting, SEC Reporting Requirements.