Securities and exchange commission

Social Media Without Big RiskThe SEC has never issued guidance about the use of social media, but it has issued guidance that websites could be deemed sufficiently "public" to satisfy Reg. FD when: (1) it is a recognized channel of distribution, (2) posting on the web site disseminates the information in a manner making it available to the securities marketplace in general, and (3) there has been a reasonable waiting period for investors and the market to react to the posted information. Indeed, "for some companies in certain circumstances, posting … information on the company's web site, in and of itself, may be a sufficient method of public disclosure," SEC Release No. 34-58288 (Aug. 7, 2008) at 18, 25. … [Read more...] about Protect Your CEO’s Tweets and Posts from U.S. Securities Exchange Commission (SEC) Enforcement Action

The practical implications of Rule 506(c) are not all that clear. While the availability of the general solicitation option for raising private risk capital will no doubt look appealing to entrepreneurs and other issuers, how many of such entrepreneurs (and what kind of entrepreneurs) will actually be interested in taking these steps and collecting this information?  More to the point, will potential investors be interested in sharing personal financial and tax records with the managers of their potential investments? … [Read more...] about Securities Exchange Commission’s (SEC) New General Solicitation Rules Are Here

As noted above, the requirement under Rule 506(c) stating that entrepreneurs engaging in general solicitation take “appropriate” steps to ensure all investors are accredited will likely be a deterrent both to entrepreneurs and investors. The rule itself does not specifically say what will be considered appropriate in a particular circumstance, but it does make clear entrepreneurs will have to do more to establish their investors are accredited. One example the new rule gives, reviewing each investor’s tax returns and/or personal financial records, will likely be problematic for many investors. … [Read more...] about The Securities Exchange Commission (SEC) New General Solicitation Rules Are Here

Plaintiffs alleged that the SEC failed to investigate the SIBL scheme and thereby contributed to plaintiffs’ loss. The United States moved to dismiss for lack of subject matter jurisdiction, arguing that the SEC’s actions fell within the “discretionary function” exception to the FTCA. Pursuant to the FTCA, a plaintiff can sue a government agency or employee who commits negligent or wrongful acts where the suit would otherwise be barred by sovereign immunity. The “discretionary function” exception removes from the ambit of the FTCA situations in which agencies or employees exercise discretionary authority.  … [Read more...] about District Court Dismisses Class Action Suit Under Federal Tort Claims Act (FTCA) Against Securities Exchange Commission (SEC)

On March 12, the Securities and Exchange Commission voted to propose new rules that would enhance the oversight of registered clearing agencies that: (1) have been designated as systemically important by the Financial Stability Oversight Council and for which the SEC is the supervisory agency pursuant to the Clearing Supervision Act; (2) provide central counterparty services for security-based swaps or are involved in activities the SEC determines to have a more complex risk profile, where in either case the Commodity Futures Trading Commission is not the supervisory agency for such clearing agency (as defined in Section 803(8) of the Clearing Supervision Act); or (3) are otherwise determined to be covered clearing agencies by the SEC  (Covered Clearing Agencies). These proposed rules would establish more robust requirements for Covered Clearing Agencies and would apply the existing rules for all other registered clearing agencies. Entities operating pursuant to an exemption from … [Read more...] about Securities & Exchange Commission (SEC) Proposes Rules to Enhance Oversight of Clearing Agencies