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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).
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.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
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.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.