A new federal law goes into effect March 29, 2023 that conditionally exempts from broker-dealer registration persons who solely intermediate small, private company M&A deals. Persons who intermediate larger private company...more
Will employment non-competes soon be banned nationally? Perhaps, if the Federal Trade Commission gets its way. Last month, the FTC issued a Notice of Proposed Rulemaking (the “NPRM”) that would prohibit just about all...more
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here”. Such was the lament of John Ray, the legendary restructuring...more
12/20/2022
/ Commercial Bankruptcy ,
Corporate Governance ,
Crypto Exchanges ,
Cryptoassets ,
Cryptocurrency ,
Directors ,
Financial Services Industry ,
Investment ,
Popular ,
Securities and Exchange Commission (SEC) ,
Venture Capital
Just last week, special purpose acquisition company The Music Acquisition Corporation (“TMAC”) called a special meeting of its stockholders. It wasn’t the special meeting it originally envisioned. TMAC was launched in...more
Elon Musk has lobbed in two additional termination letters since his original July 8 letter seeking to terminate his agreement to acquire Twitter for $44 billion. Each termination letter cites alleged false representations...more
9/19/2022
/ Bots ,
Breach of Contract ,
Cybersecurity ,
Discovery Disputes ,
Elon Musk ,
Material Adverse Effects ,
Material Misrepresentation ,
Merger Agreements ,
Popular ,
Regulatory Violations ,
Social Media ,
Termination Rights ,
Twitter ,
Whistleblowers
Two startups with competing, equally compelling technologies at the same stage of development are pitching venture capital investors for Series A funding. One startup is led by a serial entrepreneur founder, the other by a...more
What do founders, employees and investors in privately held companies all have in common? Limited opportunity to sell their shares. That’s because of various legal, contractual and market factors that impede the sale of...more
In what seems like one of the speediest transaction processes ever for a deal of its size, Twitter agreed on April 25, 2022 to be acquired by Elon Musk for $54.20 per share or about $44 billion. It all started with Musk...more
5/2/2022
/ Acquisition Agreements ,
Contract Terms ,
Corporate Sales Transactions ,
Elon Musk ,
Material Adverse Effects ,
Ordinary Course of Business Defense ,
Poison Pill ,
Reverse Triangular Mergers ,
Social Media ,
Stock Ownership ,
Stock Prices ,
Twitter
Elon Musk’s contentious relationship with the Securities and Exchange Commission is likely to become even more complicated as a result of Mr. Musk’s filings with the Commission to report his recent purchases of shares in...more
4/11/2022
/ Beneficial Owner ,
Elon Musk ,
Filing Requirements ,
Form 8-K ,
Investment ,
Passive Investments ,
Reporting Requirements ,
Schedule 13D ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Transactions ,
Securities Violations ,
Twitter
The Securities and Exchange Commission just proposed new rules to protect investors in private investment funds. The proposed rules would require private fund advisers to disclose certain information and avoid certain...more
2/22/2022
/ Accredited Investors ,
Investment ,
Investor Protection ,
Investors ,
Private Equity ,
Private Funds ,
Regulatory Oversight ,
Regulatory Reform ,
Rule 506 ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Venture Capital
2021 was a spectacular year for the American venture capital ecosystem, with VC investments, fundraising and exits all setting new highs. That according to the latest PitchBook-NVCA Venture Monitor, the self-described...more
Should a buyer be allowed to walk away from an acquisition if an extraordinary event occurs between signing and closing that forces the target company to take emergency remedial measures outside its ordinary course, even if...more
Ever since the SPAC market exploded in late 2020 and early 2021, the SEC has sounded alarm bells through investor alerts, staff statements and public comments. In March of 2021, it warned investors not to invest in SPACs...more
Background: Crypto Catch 22 -
Followers of the SEC’s efforts to regulate digital tokens will recall former SEC Corp Fin Director William Hinman’s speech at the June 14, 2018 Yahoo Finance Conference in which he introduced...more
10/18/2021
/ Blockchain ,
Cryptocurrency ,
Decentralized Finance (DeFi) ,
Digital Assets ,
Howey ,
Investment ,
Popular ,
Safe Harbors ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Virtual Currency
Lately I’ve been approached by clients and potential clients about series LLCs, so I thought it would be worth blogging about. Basically, a series LLC is an LLC that may create one or more series, each generally having...more
The Securities and Exchange Commission announced on July 13, 2021 that it settled fraud charges against a special purpose acquisition company, its sponsor, its sponsor’s CEO and its proposed merger target for making...more
7/26/2021
/ Capital Raising ,
Due Diligence ,
Enforcement Actions ,
Initial Public Offering (IPO) ,
Investment ,
Misleading Statements ,
Private Investment in Public Equity (PIPEs) ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Regulation ,
Special Purpose Acquisition Companies (SPACs)
On May 3, 2021, blockchain-based trading platform operator INX Ltd. announced it had completed its initial public offering of digital tokens, raising approximately $85 million in the IPO from over 7,200 institutional and...more
6/14/2021
/ Blockchain ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Form F-1 ,
Initial Public Offering (IPO) ,
Popular ,
Regulation A ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Venture Capital
A new reality streaming television series called Unicorn Hunters debuted last week in which startups will pitch to a panel that includes Apple co-founder Steve Wozniak, and the panelists after some grilling of the...more
5/10/2021
/ Capital Formation ,
Crowdfunding ,
Early Stage Companies ,
Emerging Growth Companies ,
Offerings ,
Popular ,
Regulation CF ,
Rule 506 Offerings ,
Securities Regulation ,
Startups ,
Unicorns ,
Venture Capital
Perhaps the most vexing threshold issue faced by any company considering a capital raise is which securities exemption to pursue. The chosen exemption largely depends on the targeted amount of the raise, as well as the...more
On December 2, the Securities and Exchange Commission filed a lawsuit against Ripple Labs, Inc. and two of its executives alleging they offered and sold over $1.38 billion of digital asset XRP without registration or...more
3/8/2021
/ Bitcoin ,
Blockchain ,
Critical Infrastructure Sectors ,
Cryptocurrency ,
Digital Currency ,
Enforcement Actions ,
Financial Services Industry ,
Popular ,
Ripple ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Unregistered Securities ,
Virtual Currency
It’s pretty common for issuers in follow-on offerings to solicit investors from previous rounds first. Indeed, doing so is often mandatory when early investors have preemptive rights. ...more
2/16/2021
/ Accredited Investors ,
Capital Raising ,
Crowdfunding ,
Financial Regulatory Reform ,
JOBS Act ,
Regulation D ,
Rule 506 Offerings ,
Rule 506(c) ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Venture Capital
A freeze on government regulation is generally perceived by most people as being a positive development for private enterprise. Not necessarily so, however, when the regulation being frozen is itself a reform of preexisting...more
1/25/2021
/ Biden Administration ,
Capital Raising ,
Crowdfunding ,
General Solicitation ,
Offerings ,
Regulation A ,
Regulation CF ,
Regulatory Freeze ,
Regulatory Reform ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Testing-the-Waters Communications ,
Venture Capital
You just raised $1 million in your crowdfunding offering under Title III/Regulation CF. That’s the good news. The bad news? You now have over a thousand shareholders on your cap table, making it unwieldy, an administrative...more
At the 1932 Democratic National Convention, the live band at one point burst into “Happy Days are Here Again”, FDR’s favorite, drawing raucous cheers from convention delegates. It went on to become the Democratic Party’s...more
Last month, The Securities and Exchange Commission passed sweeping reforms of the rules governing exempt offerings (the “2020 Reforms”) to make it easier for issuers to move from one exemption to another, to bring clarity and...more