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SEC Takes First Significant Steps Toward Crowdfunding
Recently finalized rulemaking by the SEC to implement Section 201(a)(1) of the Jumpstart Our Business Startups Act, Pub. L. No. 112-106, '201(a), 126 Stat. 306, 313 (Apr. 5, 2012) (the JOBS Act), allows issuers of securities to engage in general solicitation and advertising to accredited investors in some private placement offerings of securities. See, “Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings,” Release No. 33-9354 (Aug. 29, 2012), [hereinafter New Rule 506(c) ]. This advertising activity was previously prohibited under the widely used private placement exemption of SEC Rule 506, enacted under Regulation D to perfect exemption from the registration requirements of the Securities Act of 1933, as amended. Although the SEC's announcement leaves several notable questions unanswered, Rule 506(c) has the potential to enhance the utility of investment programs in the franchise world.
Rule 506(c) now permits securities issuers to use general advertising and solicitation, typically manifested as published advertisements, articles and notices in newspapers, magazines and other broadcast media. 17 C.F.R. 230.502(c). This will enable crowdfunding ventures and franchisors to reach a greater audience in marketing investments in their businesses. However, these issuers may sell only to accredited investors (New Rule 506(c), supra note 2), purchasers of securities who possess, or who the issuer reasonably believes immediately before the sale of securities possess, “such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.” 17 C.F.R. 230.501(a); 17 C.F.R. 230.506(b)(2)(ii).
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.