On March 22, the Senate passed an amended version of the Jump Start our Business Start-ups Bill (the JOBS Bill) which had been passed by the House with broad bi-partisan support on March 8. The bill is expected to be signed into law by the President. The law is meant to ease the regulatory burden on smaller companies and facilitate the capital formation process. The …
SEC Takes Action Against Funds Invested in Pre-IPO Shares
The last several years have seen exponential growth in the trading of private company on second market exchanges such as SharesPost, Brogger and SecondMarket. Social networking sites such as Facebook, Twitter and LinkedIn are only a few of a variety of late stage companies being traded pre-IPO. Shares in these companies most often become available when an employee seeks to cash out of some or …
Absolute Activitist Decision Delineates Extraterritorial Reach of U.S. Securities Law
In 2010, the Supreme Court addressed whether the securities laws apply extra-territorially to transactions in foreign securities of foreign issuers by foreign investors. In what are known as the “F-Cubed” cases, the court held that the anti-fraud provisions of the Securities and Exchange Act of 1934 did not apply to the foregoing types of transactions but only to “domestic transactions” which it defined to be …
SEC Provides RIAs with SPVs Additional Regulatory Relief
In a no-action letter dated January 18, 2012, the SEC (“the Commission”) provided additional guidance and relief from registration to certain registered investment advisers (“RIAs”) with special purpose vehicles (“SPVs”). In a 2o05 no-action letter, the Commission had provided exemptive relief from investment adviser registration to SPVs created by RIAs who act as the general partner or managing member to a private fund that the …