Monthly Archives: September 2013
An Overview of Regulation S – The Offshore Offering Exclusion
As I’ve repeated many times in blogs in the past, all offers, offers to sell, sales and offers to buy securities must be either registered or exempted from registration under Section 5 of the Securities Act of 1933. Regulation S provides an exclusion from the Section 5 requirements for transactions that occur outside the United States. Both private and public securities offerings made outside the United States by U.S. Issuers are excluded from the registration requirements of Section 5 as long as all the requirements of Regulation S are met. Regulation S may also be relied upon by foreign issuers; however, this blog will concentrate on offerings by U.S. Issuers and affiliates.
Offshore Transactions
An offshore transaction is one in which (i) the offer is not made to a person in the U.S.; and (ii) Either (a) at the time the buy order is originated the buyer is outside the U.S. or the seller reasonably believes the buyer is outside the U.S.; or (b) the transaction is executed on the physical trading floor of an established foreign securities exchange or for purposes of offshore resales on a designated offshore securities market and the seller is not aware that the transaction has been prearranged with a buyer in the U.S.
If the buyer is a natural person, they are deemed to be outside the U.S. if they are physically located outside the U.S. at the time of the buy order. If the buyer is a corporation or entity, they are deemed to be outside the U.S. if, at the time of the buy order, the authorized person placing the buy order is physically located outside the U.S.
Definition of U.S. Person and Unites States
The crux of Regulation S is offshore transactions to non-U.S. Persons. Regulation S defines a U.S. Person as:
(i) Any natural person resident in the United States (as defined below);
(ii) Any partnership or corporation organized or incorporated under the laws of the United States;
(iii) Any estate of which any executor or administrator is a US Person;
(iv) Any trust of which any trustee is a US Person;
(v) Any agency or branch of a foreign entity located in the United States;
(vi) Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a US Person;
(vii) Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and
(viii) Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a US Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the Securities Act) who are not natural persons, estates or trusts.
Pursuant to Regulation S “United States” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.
The Regulation S Exclusion
Regulation S is not an exemption from registration but rather an exclusion from the U.S. securities laws. Accordingly, Regulation S can be relied upon by Issuers, their distributors and affiliates. For U.S. Issuers, distributors and their affiliates, the reliance on Regulation S is predicated on three conditions: (i) offers and sales are made in an offshore transaction (i.e., outside the U.S.); (ii) no directed selling efforts are made in the U.S. by the Issuer, a distributor, either of their affiliates, or anyone acting on either of their behalf; and (iii) certain enumerated conditions are met depending on three categories of securities.
The SEC enumerates conditions to be met for 3 categories of securities based on an increasing concern that the securities could flow back into the U.S. Category 1 has no additional conditions, and categories 2 and 3 have an increasing number of restrictions that apply during a “distribution compliance period.”
A “distribution compliance period” is defined in Rule 903(f) as a period that begins on the later of when the securities are first offered to persons other than distributors or the date of the closing of the offering and continues until the end of the period enumerated in categories 1 through 3 below. The rule includes the method of calculating the distribution compliance period for continuous offerings as well. The distribution compliance period is a period following the offering where any offer or sale of the securities must meet conditions designed to prevent the securities from being brought back into the U.S.
Category 1. The only conditions to be met for category 1 securities are (i) and (ii) above; that is, the transaction must be offshore and there can be no directed selling efforts in the U.S. Securities are eligible for category 1 if:
- The securities are issued by a foreign issuer that reasonably believes, at the time of commencing the offering, that there is no substantial U.S. market interest in the securities sold, whether equity or debt, or underlying securities if warrants or options or other convertible securities are sold.
- The securities are offered and sold in an overseas directed offering, including by a foreign issuer in a single country in accordance with that country’s laws;
- The securities are offered and sold in an overseas directed offering, including non-convertible debt securities by a U.S. Issuer in a single country in accordance with that country’s laws and all elements of the debt (amount, interest, etc.) is in a non-U.S. denomination;
- Securities are backed by the full faith and credit of a foreign government; or
- Securities are offered and sold pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the U.S. and are issued for compensation for bona fide services rendered, are nontransferable, are legended and, if necessary, a stop order is placed thereon to prevent sale in the U.S. and the offering documentation contains a statement that the securities are not registered under the Securities Act and may not be offered or sold in the U.S. unless registered or an exemption is available.
Category 2. Category 2 applies to securities that do not meet the qualifications of category 1 and are equity securities of a foreign issuer, or debt securities of a reporting U.S. or foreign issuer or debt securities of a non-reporting foreign issuer. The following additional conditions apply to category 2 securities: (a) offering restrictions must be implemented; (b) the offer or sale, if made prior to the expiration of a 40-day distribution compliance period, is not made to a U.S. person or for the account or benefit of a U.S. person; and (c) each distributor selling securities to another distributor or dealer, or person receiving selling compensation, prior to the expiration of a 40-day distribution compliance period receives a confirmation that they are subject to the same distributor restrictions as the selling distributor.
Category 3. Category 3 applies to securities that do not meet the qualifications of categories 1 or 2. All category 3 transactions must implement offering restrictions. Additional conditions are imposed depending on whether the securities being sold are debt, equity or warrants/convertible securities. Category 3 covers debt or equity by non-reporting U.S. issuers; equity offerings by U.S. reporting issuers; and equity offerings by non-reporting foreign issuers for which there is a substantial U.S. market interest. Category 3 requires a 40-day distribution compliance period for certain debt securities, six-month distribution compliance period for equity securities of reporting issuers, and a one-year period for equity securities of non-reporting issuers.
Offers and sales of Category 3 securities may be made during the distribution compliance period as long as (i) they are not made to U.S. persons or for the account or benefit of U.S. persons; (ii) the purchaser agrees to resell the securities only in accordance with Regulation S, registration or an exemption from registration and agrees not to engage in hedging transaction with regard to the securities; (iii) the securities contain a legend stating that they may only be sold in accordance with Regulation S, registration or an exemption from registration and cannot be used for hedging transaction; (iv) the Issuer is required, either by contract or a provision in its bylaws or articles, to refuse to register any transfer not made in accordance with these rules; and (v) each distributor selling securities to another distributor or dealer, or person receiving selling compensation, prior to the expiration of a 40-day distribution compliance period receives a notice that they are subject to the same distributor restrictions as the selling distributor.
Additional Conditions for Warrants. Securities underlying warrants are subject to a continuous distribution compliance period as long as the warrants remain outstanding. An offer or sale of warrants under Category 2 or 3 must also comply with the following additional requirements: (i) each warrant must bear a legend stating that the warrant and underlying securities have not been registered under the Securities Act and that the warrant may not be exercised by or on behalf of any U.S. person unless registered or pursuant to an exemption; (ii) each person exercising a warrant must provide a written certification that they are not a U.S. person and that the warrant is not being exercised on behalf of a U.S. person or provide a legal opinion letter that the warrant and underlying securities have been registered or are exempt from registration; and (iii) procedures are implemented to ensure that the warrant may not be exercised with the U.S. and that the underlying securities may not be delivered within the U.S., unless registered or exempt from registration.
Directed Selling Efforts
All Regulation S transactions prohibit directed selling efforts in the U.S. Regulation S defines “directed selling efforts” as any activity undertaken for the purpose of, or that could be reasonably be expected to have the effect of, conditioning the U.S. market for any of the securities being offered in reliance on Regulation S. Directed selling efforts includes placing an advertisement in a publication with a general circulation in the U.S. that refers to the Regulation S offering. In addition, directed selling efforts include traditional solicitation methods such as direct mail, seminars, telephone solicitations, and radio and TV advertisements.
The rule excludes certain activities from the definition of directed selling efforts, including (i) placing an ad required to be published under U.S. or foreign law provided the ad contains no more information than legally required; (ii) contact with non-U.S. persons; (iii) tombstone ads in papers with less than 20% of its circulation in the U.S. and with an appropriate legend; (iv) bona fide visits to real estate, plants and other facilities; (v) distribution in the U.S. of a foreign broker-dealer’s quotations; (vi) a notice in accordance with Rules 135 or 135(c) of the Act, that the Issuer intends to make a registered or unregistered offering; (vii) providing any journalist with access to press conferences held outside of the U.S.; and (viii) publication or distribution of a research report by a broker or dealer.
The prohibition against directed selling efforts is continuous through the offering and the distribution compliance period.
Types of Regulation S Transactions
In addition to traditional stand-alone debt or equity securities offerings, Regulation S can also be used to complete a Rule 144A offering. Rule 144A technically is not an Issuer’s exemption, but rather is a safe harbor for the resale of restricted securities to QIB’s, much as Rule 144 is a safe harbor for the resale of restricted securities generally. However, since its passage in 1990, market participants have used Rule 144A as a means of raising capital for issuers by engaging in a Regulation S offering followed by the immediate resale of such securities to QIB’s in reliance on Rule 144A. This method of raising capital has become widely known as a Rule 144A Offering. Regulation S does not preclude the resale of the same securities offered in the Regulation S offering in a Rule 144A offering, even if the resale occurs during the distribution compliance period, as long as the applicable conditions of the distribution compliance period are met.
Regulation S is also relied upon for continuous debt offerings such as offshore medium-term note programs. In addition, Regulation S can be relied upon for employee benefit plan offerings outside the U.S. and in accordance with the laws of such foreign country.
No Integration – Concurrent Offerings
Regulation S, by its terms, does not integrate with either registered or “domestic offerings that satisfy the requirements for an exemption from registration under the Securities Act.” Accordingly, an Issuer can concurrently conduct a Regulation S offering and a U.S. exempt or registered offering.
A condition to Regulation S is that there can be no directed selling efforts in the United States. Many practitioners have been concerned that the new general solicitation rules would de facto eliminate the ability to engage in concurrent Rule 144A or 506 and Regulation S offerings. Since general solicitation under the new Rule 506(c) or Rule 144A would satisfy the requirements of a US exemption, the SEC will not view concurrent offerings under Rule 506(c) and/or Rule 144A and Regulation S as integrating such as to destroy the Regulation S exemption.
Resale Restrictions
Securities cannot be offered or sold to U.S. person during the distribution compliance period unless the transaction is registered under the Securities Act or exempt from registration. To refresh, there is no distribution compliance period for category 1 securities. The distribution compliance period for category 2 securities is 40 days. The distribution compliance period for category 3 transactions involving debt is 40 days; for the equity of reporting issuers it is six months, and for the equity of non-reporting Issuers it is one year.
Offshore resales may be made as long as (i) offers and sales are made in an offshore transaction (i.e., outside of the U.S.); (ii) no directed selling efforts are made in the U.S. by the Issuer, a distributor, either of their affiliates, or anyone acting on either of their behalf; and (iii) certain enumerated conditions are met, if applicable. In particular, if a resale is made by a distributor or dealer (i) neither the seller nor any person acting on its behalf knows that the buyer is a U.S. person; and (ii) if the sale is to another distributor or dealer, the seller sends a confirmation including a statement that the securities can only be sold during the distribution compliance period in accordance with Regulation S. If an offshore resale is made by an affiliate of the issuer, including an officer or director, no selling concession, fee or other remuneration may be paid other than customary broker’s commissions.
The Author
Laura Anthony, Esq.
Founding Partner
Legal & Compliance, LLC
Corporate, Securities and Going Public Attorneys
LAnthony@LegalAndCompliance.com
Securities attorney Laura Anthony and her experienced legal team provides ongoing corporate counsel to small and mid-size private companies, OTC and exchange traded issuers as well as private companies going public on the NASDAQ, NYSE MKT or over-the-counter market, such as the OTCQB and OTCQX. For nearly two decades Legal & Compliance, LLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, S-8 and S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; Regulation A/A+ offerings; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers, ; applications to and compliance with the corporate governance requirements of securities exchanges including NASDAQ and NYSE MKT; crowdfunding; corporate; and general contract and business transactions. Moreover, Ms. Anthony and her firm represents both target and acquiring companies in reverse mergers and forward mergers, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. Ms. Anthony’s legal team prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SROs such as FINRA and DTC for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the OTC Market’s top source for industry news, and the producer and host of LawCast.com, the securities law network. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Las Vegas, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Contact Legal & Compliance LLC. Technical inquiries are always encouraged.
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Legal & Compliance, LLC makes this general information available for educational purposes only. The information is general in nature and does not constitute legal advice. Furthermore, the use of this information, and the sending or receipt of this information, does not create or constitute an attorney-client relationship between us. Therefore, your communication with us via this information in any form will not be considered as privileged or confidential.
This information is not intended to be advertising, and Legal & Compliance, LLC does not desire to represent anyone desiring representation based upon viewing this information in a jurisdiction where this information fails to comply with all laws and ethical rules of that jurisdiction. This information may only be reproduced in its entirety (without modification) for the individual reader’s personal and/or educational use and must include this notice.
© Legal & Compliance, LLC 2016
An Overview of Exemptions for Hedge Fund Advisors: Exemptions for Advisors to Venture Capital Funds, Private Fund Advisors with Less Than $150 Million in Assets Under Management, and Foreign Private Advisors – Part IV
The JOBS Act is not the only recent congressional act to change the landscape of hedge funds; the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) made significant changes as well.
In particular, the Dodd-Frank Act eliminated the oft relied upon exemption from registration for private hedge fund advisors for those advisors with fewer than 15 clients. While eliminating the private advisor exemption, Dodd-Frank created three new exemptions, which are the operable hedge fund advisor exemptions today. These exemptions are for:
(1) Advisors solely to venture capital funds;
(2) Advisors solely to private funds with less than $150 million in assets under management in the U.S.; and
(3) Certain foreign advisers without a place of business in the U.S.
Moreover, the Dodd-Frank Private Fund Investment Advisers Registration Act of 2010 (the “Advisers Act”) imposed certain limited filing requirements for those advisers claiming one of the 3 new exemptions.
The replacement exemptions only pertain to private fund advisers. Private funds include hedge funds, private equity funds and other types of pooled investment vehicles that are excluded from the definition of “investment company” under the Investment Company Act of 1940 under either section 3(c)(1) or 3(c)(7). Section 3(c)(1) is available to a fund that does not publicly offer its securities and has 100 or fewer beneficial owners of its securities. Section 3(c)(7) is available to a fund that does not publicly offer its securities and limits the owners of its securities to qualified investors (note that it is funds relying on this exemption which will reap the greatest benefit from the JOBS Act).
In this series of blogs, I am providing an overview of each of these exemptions and of the form filing and limited reporting requirements for exempt advisors. This final part in the series, Part IV, discusses the exemption for advisors for certain foreign advisers without a place of business in the U.S. Part I in the series was initially published on May 16, 2013, Part II on May 21, 2013 and Part III on August 7, 2013. Moreover, Part III briefly discussed the limiting filing requirements for exempt advisors. All can be reviewed at my blog site: www.securities-law-blog.com.
Exemption for Foreign Private Advisors
Section 203(b)(3) of the Advisors Act exempts from registration certain foreign advisers without a place of business in the U.S. A foreign private advisor is defined as one that (i) has no place of business in the United States; (ii) has, in total, fewer than 15 clients in the U.S.; (iii) has aggregate assets under management attributable to the U.S. clients of less than $25 million; and (iv) does not hold itself out to the public in the U.S. as an investment adviser.
Calculation of Number of Clients
Rule 202(a)(30)-1 allows an adviser to treat as a single client, a natural person together with that person’s minor children (regardless of address); spouse, any relative or relative of the spouse or spouse equivalent that lives at the same address; and all accounts for which each of the above are beneficiaries. In addition, the adviser can treat a business entity and up to 2 additional business entities with the identical equity holders as a single client. Moreover, although beneficial owners of a private fund are each counted as a separate investor, as long as at least one investor of the private fund is counted, the private fund itself is not included in the count. If an adviser reasonably believes that an investor is not in the U.S., the adviser may treat the investor as not being in the U.S. This is an overview, as the rules contain nuances for calculations of beneficial owners, which is beyond the scope of this blog.
Determination of “In the United States”
A determination of what it means to be in the U.S. forms the foundation of this exemption in that each of the elements of the exemption requires such a determination. Rule 202(a)(30)-1 defines “in the United States” to mean (i) with respect to any place of business, any such place that is located in the U.S. as defined in Regulation S; (ii) with respect to any to any client or private investor in the U.S., any person who is a U.S. person as defined in Regulation S; and (iii) with respect to the public, in the U.S. as defined in Regulation S. In addition, deviating from Regulation S, in the United States includes any discretionary account owned by a U.S. person and managed by a non-U.S. affiliate of the adviser in order to discourage non-U.S. advisers from creating such discretionary accounts with the goal of circumventing the exemption’s limitation with respect to advising assets of persons in the United States.
Regulation S defines a “US Person” as:
(i) Any natural person resident in the United States (as defined below);
(ii) Any partnership or corporation organized or incorporated under the laws of the United States;
(iii) Any estate of which any executor or administrator is a US person;
(iv) Any trust of which any trustee is a US person;
(v) Any agency or branch of a foreign entity located in the United States;
(vi) Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a US person;
(vii) Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and
(viii) Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a US person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the Securities Act) who are not natural persons, estates or trusts.
Regulation S defines “United States” as the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.
Place of Business
Rule 202(a)(30)-1 defines “place of business” to mean any office where the investment adviser regularly provides advisory services, solicits, meets with, or otherwise communicates with clients, and any location held out to the public as a place with the adviser conducts any such activities.
Assets Under Management
Instructions to Form ADV provides a required and uniform method of calculating assets under management. Although an in-depth review of such calculations is beyond the scope of this blog, in summary, advisers must include proprietary assets and assets managed without compensation as well as uncalled capital commitments. In addition, asset value must be based on gross market value or gross fair value if market value cannot be determined. Deductions may not be made for liabilities, accrued fees or expenses.
The Author
Laura Anthony, Esq.
Founding Partner
Legal & Compliance, LLC
Corporate, Securities and Going Public Attorneys
LAnthony@LegalAndCompliance.com
Securities attorney Laura Anthony and her experienced legal team provides ongoing corporate counsel to small and mid-size private companies, OTC and exchange traded issuers as well as private companies going public on the NASDAQ, NYSE MKT or over-the-counter market, such as the OTCQB and OTCQX. For nearly two decades Legal & Compliance, LLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, S-8 and S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; Regulation A/A+ offerings; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers, ; applications to and compliance with the corporate governance requirements of securities exchanges including NASDAQ and NYSE MKT; crowdfunding; corporate; and general contract and business transactions. Moreover, Ms. Anthony and her firm represents both target and acquiring companies in reverse mergers and forward mergers, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. Ms. Anthony’s legal team prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SROs such as FINRA and DTC for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the OTC Market’s top source for industry news, and the producer and host of LawCast.com, the securities law network. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Las Vegas, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Contact Legal & Compliance LLC. Technical inquiries are always encouraged.
Follow me on Facebook, LinkedIn, YouTube, Google+, Pinterest and Twitter.
Download our mobile app at iTunes.
Legal & Compliance, LLC makes this general information available for educational purposes only. The information is general in nature and does not constitute legal advice. Furthermore, the use of this information, and the sending or receipt of this information, does not create or constitute an attorney-client relationship between us. Therefore, your communication with us via this information in any form will not be considered as privileged or confidential.
This information is not intended to be advertising, and Legal & Compliance, LLC does not desire to represent anyone desiring representation based upon viewing this information in a jurisdiction where this information fails to comply with all laws and ethical rules of that jurisdiction. This information may only be reproduced in its entirety (without modification) for the individual reader’s personal and/or educational use and must include this notice.
© Legal & Compliance, LLC 2016
State Crowdfunding Using Intrastate Offerings and Rule 147
The SEC has yet to publish proposed rules under Title III of the JOBS Act – the Crowdfunding Act. The Crowdfunding Act amends Section 4 by of the Securities Act of 1933 (the Securities Act) to create a new exemption to the registration requirements of Section 5 of the Securities Act. The new exemption allows Issuers to solicit “crowds” to sell up to $1 million in securities as long as no individual investment exceeds certain threshold amounts.
The threshold amount sold to any single investor cannot exceed (a) the greater of $2,000 or 5% of the annual income or net worth of such investor, if their annual income or net worth is less than $100,000; and (b) 10% of the annual income or net worth of such investor, not to exceed a maximum $100,000, if their annual income or net worth is more than $100,000. In addition, Section 302 of the Crowdfunding Act requires that all Crowdfunding offerings be conducted through an intermediary that is a broker-dealer or funding portal that is registered with the SEC and be a member of the Financial Industry Regulatory Authority (FINRA).
The actual implementation and rule making associated with the Crowdfunding Act is in the hands of the SEC. Moreover, many proponents are concerned that the federal Crowdfunding Act as promulgated by the SEC will be cumbersome for small businesses, and the states are cognizant of this concern and the immediate need for a method for small businesses to raise funds using social media and other general solicitation and advertising without accredited investor restrictions. Accordingly, many states have recently either enacted or introduced state-specific crowdfunding legislation. Georgia, Kansas and Idaho have already enacted legislation. California has granted at least one permit to allow for a crowdfunded offering. Washington and North Carolina have pending crowdfunding bills, and Nebraska and Maine are drafting bills.
Federal Authority for State Crowdfunding Legislation
Both the federal government and individual states regulate securities, with the federal provisions often preempting state law. When federal provisions do not preempt state law, both federal and state law must be complied with. On the federal level, every issuance of a security must either be registered under Section 5 of the Securities Act, or exempt from registration. Section 3(a)(11) of the Securities Act of 1933, as amended (Securities Act) provides an exemption from the registration requirements of Section 5 for “[A]ny security which is a part of an issue offered and sold only to persons resident within a single State or Territory, where the issuer of such security is a person resident and doing business within or, if a corporation, incorporated by and doing business within, such State or Territory.” Section 3(a)(11) is often referred to as the Intrastate Exemption. Rule 147 promulgated under Section 3(a)(11) provides for further details on the application of the Intrastate Exemption.
On the federal level, Issuers relying on state crowdfunding statutes rely upon the Intrastate Exemption together with Rule 147 promulgated thereunder. The Intrastate Exemption is only available for bona fide local offerings. That is, the Issuer must be a resident of and doing business within the state in which all offers and sales are made, and no part of the offering may be offered or sold to nonresidents. Because of the strict rules against any sales or offers to nonresidents, Issuers conducting concurrent or consecutive offerings need to be extra careful to avoid the integration of any non-intrastate transactions with the Intrastate Exemption.
Avoiding Integration While Using the Intrastate Exemption
The determination of whether two or more offerings could be integrated is a question of fact depending on the particular circumstances at hand. Rule 502(a) and SEC Release 33-4434 set forth the factors to be considered in determining whether two or more offerings may be integrated. In particular, the following factors need to be considered in determining whether multiple offerings are integrated: (i) are the offerings part of a single plan of financing; (ii) do the offerings involve issuance of the same class of securities; (iii) are the offerings made at or about the same time; (iv) is the same type of consideration to be received; and (v) are the offerings made for the same general purpose.
In addition, Rule 147(b)(2) provides an integration safe harbor. That is, offerings made under Section 3 or Section 4(2) of the Securities Act or pursuant to a registration statement will not be integrated with an Intrastate Exemption offering if such offerings take place six month prior to the beginning or six month following the end of the Intrastate Exemption offering. To rely on this safe harbor, during the six-month periods, an Issuer may not make any offers or sales of securities of the same class as those offering in the Intrastate offering. Rule 147(b)(2) is merely a safe harbor. Issuers and practitioners may still conduct their own analysis in accordance with the five-factor test enumerated above.
Determining Whether an Issuer is a “Resident” of and Doing Business in a Particular State
For purposes of the Intrastate Exemption, an Issuer shall be deemed to be a resident of the state in which: (i) it is incorporation or organized if it is an entity requiring incorporation or organization; (ii) its principal office is located if it is an entity not requiring incorporation or organization; or (iii) his or her principal residence is located, if an individual.
For purposes of the Intrastate Exemption, an Issuer shall be deemed to be doing business within a state if: (i) the Issuer, together with is subsidiaries, derived at least 80% of its gross revenues in the most recent fiscal year or most recent six-month period from that state, whichever is closer in time to the offering; (ii) the Issuer had 80% of its assets located in that state in the most recent semiannual fiscal year; (iii) the Issuer intends to use and uses at least 80% of the net proceeds from the Intrastate offering in connection with the operation of a business or of real property, the purchase of real property located in, or the rendering of services in that state; and (iv) the principal office of the Issuer is located within that state.
Determining Whether the Investors and Potential Investors are Residents of a Particular State
All offers, offers to sell, offers for sale and sales of securities in an Intrastate exempted offering must be made to residents of the state in which the offering is conducted. For the purpose of determining the residence of an offeree or Purchaser: (i) a corporation, partnership, trust or other form of business organization shall be deemed to be a resident of a state if, at the time of the offer and sale, it has its principal office within such state; (ii) an individual shall be deemed to be a resident of a state if, at the time of the offer and sale, his or her principal residence is within that state; and (iii) a corporation partnership, trust or other form of business organization formed specifically to take part in an Intrastate offering will not be resident of the state unless all of its beneficial owners are resident of that state.
Resale Restrictions
Even though securities issued relying on the Intrastate Exemption are not restricted securities for purposes of Rule 144, Rule 147(e) prohibits the resale of any such securities for a period of nine months except for resales made in the same state as the Intrastate Offering. Moreover, market makers or dealers desiring to quote such securities after the nine-month period must comply with all of the requirements of Rule 15c2-11 regarding current public information. Moreover, Rule 147 specifically requires the placing of a legend on any securities issued in an Intrastate offering setting forth the resale restrictions. In the case of an allowable in-state resale, the purchaser must provide written representations supporting their state of residence.
Advertising and Solicitation
There is no prohibition in Section 3(a)(11) or Rule 147 regarding general advertising or general solicitation as long as such general advertising or solicitation complies with applicable state law and does not result in an offer or sale to nonresidents of such state.
State Crowdfunding Statutes
As state crowdfunding statutes rely on Section 3(a)(11) and Rule 147, each state statute contains provisions that mirror and effectuate the local requirements of the federal statue and rule. In addition, each state statute to date contains provisions similar to Title III of the JOBS Act. For example, the pending Washington bill allows companies to sell up to $1,000,000 in securities in a 12-month period through crowdfunding. Investors may purchase the greater of $2,000 in securities or 5% of their annual income or net worth if it’s less than $100,000 or 10% of their annual income or net worth if same is more than $100,000. Crowdfunding portals are required to register with the state, and such portals are limited to operations within the state of Washington.
The North Carolina statute limits a raise to $1,000,000 in a 12-month period unless audits for the prior year are provided, in which case the raise is limited to $2,000,000. Unaccredited investors could buy up to $2,000 in stock, with higher limits for accredited investors. Portals are required to register with the state.
The Author
Laura Anthony, Esq.
Founding Partner
Legal & Compliance, LLC
Corporate, Securities and Going Public Attorneys
LAnthony@LegalAndCompliance.com
Securities attorney Laura Anthony and her experienced legal team provides ongoing corporate counsel to small and mid-size private companies, OTC and exchange traded issuers as well as private companies going public on the NASDAQ, NYSE MKT or over-the-counter market, such as the OTCQB and OTCQX. For nearly two decades Legal & Compliance, LLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, S-8 and S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; Regulation A/A+ offerings; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers, ; applications to and compliance with the corporate governance requirements of securities exchanges including NASDAQ and NYSE MKT; crowdfunding; corporate; and general contract and business transactions. Moreover, Ms. Anthony and her firm represents both target and acquiring companies in reverse mergers and forward mergers, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. Ms. Anthony’s legal team prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SROs such as FINRA and DTC for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the OTC Market’s top source for industry news, and the producer and host of LawCast.com, the securities law network. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Las Vegas, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Contact Legal & Compliance LLC. Technical inquiries are always encouraged.
Follow me on Facebook, LinkedIn, YouTube, Google+, Pinterest and Twitter.
Download our mobile app at iTunes.
Legal & Compliance, LLC makes this general information available for educational purposes only. The information is general in nature and does not constitute legal advice. Furthermore, the use of this information, and the sending or receipt of this information, does not create or constitute an attorney-client relationship between us. Therefore, your communication with us via this information in any form will not be considered as privileged or confidential.
This information is not intended to be advertising, and Legal & Compliance, LLC does not desire to represent anyone desiring representation based upon viewing this information in a jurisdiction where this information fails to comply with all laws and ethical rules of that jurisdiction. This information may only be reproduced in its entirety (without modification) for the individual reader’s personal and/or educational use and must include this notice.
© Legal & Compliance, LLC 2016
Will FINRA Rule Changes Related to Private Placement Further Deter Broker Dealers From Placing the Securities of Small Businesses?
On August 19, 2013, FINRA published Regulatory Notice 13-26 about the updated Private Placement Form that firms must file with FINRA when acting as a placement agent for the private placement of securities. A copy of the form is included with the regulatory notice at www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p325359.pdf. The Form went effective on July 1, 2013. FINRA has also updated the FAQs relating to the Private Placement Form. The updated Private Placement Form has six new questions:
- Is this a contingency offering?
- Does the issuer have any independently audited financial statements for the issuer’s most recent fiscal year?
- Is the issuer able to use offering proceeds to make or repay loans to, or purchase assets from, any officer, director or executive management of the issuer, sponsor, general partner, manager, advisor or any of the issuer’s affiliates?
- Does the issuer have a board of directors comprised of a majority of independent directors or a general partner that is unaffiliated with the firm?
- Has the issuer engaged, or does the member anticipate that the issuer will engage, in a general solicitation in connection with the offering or sale of the securities?
- Has the issuer, any officer, director or executive management of the issuer, sponsor, general partner, manager, advisor, or any of the issuer’s affiliates been the subject of SEC, FINRA, or state disciplinary actions or proceedings or criminal complaints within the last 10 years?
Answering the new questions is not a precondition to acting as placement agent, and FINRA specifically notes that firms can respond “unknown” to any of the questions. However, as with all regulated businesses, the broker dealers are motivated to demonstrate efficient compliance procedures and diligent compliance with all FINRA rules and regulations. Moreover, broker dealers are also dealing with heightened scrutiny resulting from new regulations imposed by the Dodd-Frank Act.
The changes come effective just as the SEC has adopted final rules eliminating the prohibition against general solicitation and advertising in Rules 506 and 144A offerings as required by Title II of the JOBS Act. On the same day, the SEC adopted amendments to Rule 506 to disqualify “felons and bad actors” from participating in Rule 506 offerings. Each of the new rules will require heightened due diligence and increased internal procedures related to private placements.
Rules relating to general solicitation and advertising will affect broker dealers
In particular, the rules allowing general solicitation require that the Issuer, and therefore its placement agent, take reasonable steps to verify that each purchaser is accredited. The SEC published a non-exclusive list of methods that Issuers may use to satisfy the verification requirement. Note that the verification requirement is separate from the requirement that all investors in fact be accredited.
According to the SEC, “whether the steps taken are ‘reasonable’ would be an objective determination, based on the particular facts and circumstances of each transaction.” Among the factors that Issuers should consider under the fact and circumstance analysis are:
a. The nature of the purchaser and type of accredited investor they claim to be. For instance, if the purchaser is claiming that they are accredited because they are a broker dealer registered with the SEC, verification could be a simple check on the FINRA website. Of course, the hardest status to verify will be natural persons claiming they meet the net worth ($1 million) or income ($200,000 a year) requirements. Accordingly, as set forth below, the SEC final rule sets forth non-exclusive methods that Issuers may use to satisfy the verification requirement.
b. The amount and type of information that the Issuer has about the purchaser. Clearly, the more information, the better. The SEC lists the obvious (W-2; tax returns; letters from a bank or broker dealer). Moreover, although not required, it is assumed that an Issuer should at least conduct a check of publicly available information.
c. Nature and terms of the offering, such as type of solicitation and minimum investment requirements. The example proffered by the SEC is an offering conducted by soliciting preapproved accredited investor lists from a reasonably reliable third party, vs. open-air solicitation via social media or television or radio advertising—the latter, of course, requiring greater verification than the former. The SEC highlights the obvious, such as that the higher the minimum investment required, the fewer steps an Issuer would need to take to verify accreditation.
Examples of the type of information that Issuers and their placement agents can review and rely upon include:
(i) Publicly available information in filings with federal, state and local regulatory bodies (for example: Exchange Act reports; public property records; public recorded documents such as deeds and mortgages)
(ii) Third-party evidentiary information including, but not limited to, pay stubs, tax returns, and W-2 forms
(iii) Third-party accredited investor verification service providers
The SEC published four specific non-exclusive methods of verifying accredited investor status for natural persons which, if used, will be deemed to satisfy the verification requirements as long as the Issuer does not have actual knowledge that the purchaser is not accredited. Issuers are not required to use these methods of verification and can rely on their own reasonableness standard directed to the specific facts and circumstances. The non-exclusive methods of verification include:
aa. Review of copies of any Internal Revenue Service form that reports income including, but not limited to, a Form W-2, Form 1099, Schedule K-1 and a copy of a filed Form 1040 for the two most recent years along with a written representation that the person reasonably expects to reach the level necessary to qualify as an accredited investor during the current year. If such forms and information are joint with a spouse, the written representation must be from both spouses.
bb. Review of one or more of the following, dated within three months, together with a written representation that all liabilities necessary to determine net worth have been disclosed. For assets: bank statements, brokerage statements and other statements of securities holdings, certificates of deposit, tax assessments and appraiser reports issued by third parties and for liabilities, credit report from a nationwide agency.
cc. Obtaining a written confirmation from a registered broker dealer, an SEC registered investment advisor, a licensed attorney, or a CPA that such person or entity has taken reasonable steps to verify that the purchaser is an accredited investor within the prior three months.
dd. A written certification verifying accredited investor status from existing accredited investors of the Issuer that have previously invested in a 506 offering with the same Issuer.
Placement agents, under review by FINRA, will need to have properly documented files on each investor and their accreditation verification.
The disqualification of bad boys and felons require heightened diligence
On July 10, 2013, the same day the SEC has adopted final rules eliminating the prohibition against general solicitation and advertising in Rules 506 and 144A offerings as required by Title II of the JOBS Act, the SEC adopted new rules disqualifying felons and other bad actors from participating in Rule 506 offerings as required by Section 926 of the Dodd-Frank Act. The new rules will require due diligence by broker dealers to ensure compliance by Issuers for which they act as placement agent.
New Rule 506(d) applies to the following categories of persons (“covered persons”):
The Issuer and any predecessor of the Issuer or affiliated Issuer;
Any director, general partner or managing member of the Issuer and executive officers (i.e., those officers that participate in policymaking functions) and officers who participate in the offering (participation is a question of fact and includes activities such as involvement in due diligence, communications with prospective investors, document preparation and control, etc.);
Any beneficial owner of 20% or more of the outstanding equity securities of the Issuer calculated on the basis of voting power (voting power is undefined and meant to encompass the ability to control or significantly influence management or policies; accordingly, the right to elect or remove directors or veto or approve transactions would be considered voting);
Investment managers of Issuers that are pooled investment funds; the directors, executive officers, and other officers participating in the offering, general partners and managing members of such investment managers; and the directors and executive officers of such general partners and managing members and their other officers participating in the offering (i.e., the hedge fund coverage; the term “investment manager” is meant to encompass both registered and exempt investment advisers and other investment managers);
Any promoter connected with the Issuer in any capacity at the time of the sale (a promoter is defined in Rule 405 as “any person, individual or legal entity, that either alone or with others, directly or indirectly takes initiative in founding the business or enterprise of the issuer, or, in connection with such founding or organization, directly or indirectly receives 10% or more of any class of issuer securities or 10% or more of the proceeds from the sale of any class of issuer securities other than securities received solely as underwriting commissions or solely in exchange for property”);
Any person that has been or will be paid, either director or indirectly, remuneration for solicitation of purchasers in connection with sales of securities in the offering; and
Any director, officer, general partner, or managing member of any such compensated solicitor.
New Rule 506(d) enumerates the following disqualifying events:
- Criminal convictions (felony or misdemeanor) within the last five years in the case of Issuers, their predecessors and affiliated Issuers, and ten years in the case of other covered persons, in connection with the purchase or sale of any security; involving the making of a false filing with the Commission; or arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
- Court injunctions and restraining orders, including any order, judgment or decree of any court of competent jurisdiction, entered within five years before such sale that, at the time of such sale, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice in connection with the purchase or sale of any security; involving the making of a false filing with the Commission; or arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
- Final orders issued by state securities commission (or any agency of a state performing like functions), a state authority that supervises or examines banks, savings and associations, or credit unions, state insurance regulators, federal banking regulators, the CFTC, and the National Credit Union Administration, that at the time of the sale, bars the person from association with any entity regulated by the regulator issuing the order or from engaging in the business of securities, insurance or banking or engaging in savings association or credit union activities; or constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the last ten years before the sale;
- Any order of the SEC entered pursuant to Section 15(b) or 15B(c) of the Exchange Act or section 203(c) or (f) of the Investment Advisors Act that, at the time of such sale, suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment advisor; places limitations on the activities, functions or operations of such person; or bars such person from being associated with any entity or from participating in the offering of any penny stock;
- Is the subject to any order of the SEC entered within five years before such sale, that at the time of such sale, orders the person to cease and desist from committing or causing a violation of future violation of any scienter-based anti-fraud provision of the federal securities laws (including, without limitation, Section 17(a)(10) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 15(c)(1) of the Exchange Act and Section 206(1) of the Advisor Act, or any other rule or regulation thereunder) or Section 5 of the Securities Act;
- Suspension or expulsion from membership in, or suspension or a bar from association with a member of, an SRO, i.e., a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade;
- Has filed (as a registrant or Issuer), or was or was named as an underwriter in, any registration statement or Regulation A offering statement filed with the Commission that, within five years before such sale, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, at the time of such sale, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued; and
- U.S. Postal Service false representation orders, including temporary or preliminary orders entered within the last five years.
Proposed new rules affecting private placements
On July 10, 2013, the same day the SEC adopted final rules eliminating the prohibition against general solicitation and advertising in Rules 506 and 144A offerings as required by Title II of the JOBS Act, and adopted new rules disqualifying felons and other bad actors from participating in Rule 506 offerings as required by Section 926 of the Dodd-Frank Act, the SEC issued proposed rules further amending Regulation D, Form D and Rule 156.
The proposed amendments will (i) require the filing of a Form D to be made before the Issuer engages in any general solicitation or advertising in a Rule 506(c) offering and require the filing of a closing amendment to the Form D at the termination of the offering; (ii) require that all written general solicitation material used in a Rule 506(c) offering include certain legends and disclosures; (iii) require that all written material used in general solicitation and advertising be submitted to the SEC; (iv) disqualify an Issuer from relying on Rule 506 for one year for future offerings if the Issuer, or any predecessor or affiliate of the Issuer, failed to comply with the Form D filing requirements for a Rule 506 offering in the last five years; (v) amend the Form D to include additional information about offerings; and (vi) amend Rule 156 to extend the antifraud guidance in the rule to include sales literature of private funds (hedge funds). In addition, as part of the proposed rule release, the SEC is seeking comments from the public on the definition of “Accredited Investor.”
With respect to Form D, the SEC is proposing to:
Amend Rule 503 to require: (1) the filing of a Form D no later than 15 calendar days in advance of the first use of general solicitation in a Rule 506(c) offering; (2) the filing of an amended Form D within 15 days of the first sale of securities under the offering; and (3) the filing of a closing amended Form D within 30 calendar days of the termination of the offering (in the case where an Issuer does not use general solicitation and advertising until 15 days or more after the first sale, (1) and (2) would be accomplished in a single filing);
Amend Form D to require additional information regarding offerings;
Amend Rule 507 to disqualify an Issuer from relying on Rule 506, for one year, if the Issuer or any predecessor or affiliate of the Issuer failed to comply with the Form D filing requirements within the last five (5) years.
An in-depth discussion of the proposed new rules is not included in this blog, but previous blogs have provided detailed discussion and are available on www.securities-law-blog.com.
All of the proposed rules will affect broker dealers. It is likely that the broker dealer placement agent will be responsible for uploading general solicitation to the SEC website and monitoring its Issuer clients to ensure compliance with the filing requirements, all at increased expense and effort.
Increased Dodd-Frank statutory liability
The Dodd-Frank Act has potentially increased liability for secondary participants through two provisions. These two provisions, which added new Sections 9(a)(4) and 9(f) of the Securities Exchange Act of 1934, dramatically change the liability exposure of intermediaries in the sale of securities, such as broker dealers.
Section 9(a)(4) of the 1934 Act makes it unlawful for any broker, dealer or other person selling or offering to sell (or purchasing or offering to purchase) any security other than a government security, “to make. . . for the purpose of inducing the purchase or sale of such security, . . . any statement which was at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, and which that person knew or had reasonable ground to believe was so false or misleading.” Previously, Section 9 of the 1934 Act applied only to securities traded on an exchange. Now it applies to any securities, excluding government securities—another change that was part of the Dodd-Frank Act. In other words, a broker dealer can be liable for untrue statements or omissions in offering documents including private placements, and very soon, advertisements.
Dodd-Frank also added Section 9(f) to the 1934 Act, which says that anyone who “willingly participates” in an act or transaction in violation of Section 9(a) above is liable to the person who bought the security.
Conclusion
Broker dealers have more potential liability than ever before when acting as placement agents for transactions, and their fees are limited vis-à-vis the amount of the transaction. The rule changes have required and will continue to require increased procedures and back office support with the concurrent increased overhead. Moreover, the due diligence process and review and administrative back office expenses are generally fixed costs with only a small variance due to the size of the offering. Accordingly, broker dealers will be less motivated to place private transactions for small businesses as the potential fees will be proportionately less.
Small businesses that hope to attract broker dealer placement agents need to be more organized and prepared than ever.
The Author
Laura Anthony, Esq.
Founding Partner
Legal & Compliance, LLC
Corporate, Securities and Going Public Attorneys
LAnthony@LegalAndCompliance.com
Securities attorney Laura Anthony and her experienced legal team provides ongoing corporate counsel to small and mid-size private companies, OTC and exchange traded issuers as well as private companies going public on the NASDAQ, NYSE MKT or over-the-counter market, such as the OTCQB and OTCQX. For nearly two decades Legal & Compliance, LLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, S-8 and S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; Regulation A/A+ offerings; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers, ; applications to and compliance with the corporate governance requirements of securities exchanges including NASDAQ and NYSE MKT; crowdfunding; corporate; and general contract and business transactions. Moreover, Ms. Anthony and her firm represents both target and acquiring companies in reverse mergers and forward mergers, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. Ms. Anthony’s legal team prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SROs such as FINRA and DTC for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the OTC Market’s top source for industry news, and the producer and host of LawCast.com, the securities law network. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Las Vegas, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Contact Legal & Compliance LLC. Technical inquiries are always encouraged.
Follow me on Facebook, LinkedIn, YouTube, Google+, Pinterest and Twitter.
Download our mobile app at iTunes.
Legal & Compliance, LLC makes this general information available for educational purposes only. The information is general in nature and does not constitute legal advice. Furthermore, the use of this information, and the sending or receipt of this information, does not create or constitute an attorney-client relationship between us. Therefore, your communication with us via this information in any form will not be considered as privileged or confidential.
This information is not intended to be advertising, and Legal & Compliance, LLC does not desire to represent anyone desiring representation based upon viewing this information in a jurisdiction where this information fails to comply with all laws and ethical rules of that jurisdiction. This information may only be reproduced in its entirety (without modification) for the individual reader’s personal and/or educational use and must include this notice.
© Legal & Compliance, LLC 2016