The Broker-Dealer section of the North American Securities Administrators Association (“NASAA”) recently sent out a notice of request for comment on a proposed uniform state model rule (“Model Rule”) that would exempt merger and acquisition brokers (“M&A Brokers”) from state securities registration if certain requirements were met. While NASAA’s proposed…
On October 22, 2014, Michigan took a significant step to increase investment crowdfunding opportunities for Michigan businesses by becoming the first state to establish an intrastate market where broker-dealers can sell securities of Michigan-based companies. While “crowdfunding” can have different meanings, including rewards-based fundraising campaigns on sites like Kickstarter and…
In a settlement that underscores the SEC’s increased scrutiny of crowdfunding sites and whether they are acting as broker-dealers, the SEC agreed to a settlement with Eureeca Capital SPC (“Eureeca”), on November 10, 2014, over charges alleging willful violations of Sections 5(a) and 5(c) of the Securities Act and Section…
On December 15, 2014, the North American Securities Administrators Association (“NASAA”) launched an online electronic filing system to be used for issuers filling Form D, Rule 506 offerings with state securities regulators. The purposes of this new electronic filing depository (“EFD”) website, according to NASAA president William Beatty, are to…
In 2005, an American Bar Association task force published an exhaustively researched report that highlighted a huge “gray market” of unregistered brokerage activity, conducted by people that sometimes refer to themselves as “finders,” that is critical to the development of early stage companies, but operating in technical violation of the…
During the January 7th Practising Law Institute conference on Hedge Fund Compliance and Regulatory Challenges, the Director of the SEC Office of Compliance Inspections and Examinations (“OCIE”), Andrew Bowden, previewed some of the new priorities on which the SEC will focus in 2015. Some of the areas of focus include…
On December 22, 2014, the SEC announced a settlement with F-Squared Investments (“F-Squared”) in which F-Squared will pay a civil penalty and disgorgement for violations of the anti-fraud provisions of the Investment Advisers Act by advertising falsely inflated performance numbers of its most successful exchange traded fund (“ETF”) investment strategy.…
As the use of social media becomes more prevalent and popular, businesses and financial institutions have begun to utilize the new methods of communication that social media can provide. Many businesses already maintain blogs or interactive accounts like Twitter, Facebook, and Instagram as a method of marketing and interacting with…
Last month at the American Law Institute’s Conference on Life Insurance Company Products, the chief of the SEC’s Office of Compliance, Inspections, and Examinations (“OCIE”) informed attendees that the agency will increase its focus on variable annuities during 2015. Also attending the conference was the Director of the SEC’s Division…
On November 17th, the Texas State Securities Board’s Office of Inspections and Compliance charged Mowery Capital Management, LLC (“Mowery Capital”) and one of its investment adviser representatives (collectively “Respondents”) with fraud for failing to disclose certain conflicts of interests, charging excessive fees, plagiarizing advertising material, and other material misrepresentations. The…