SEC Proposes Improvements to Acquired Business Financial Statement Requirements

Guest post by attorneys at Shearman & Sterling LLP

On May 3, 2019, the SEC proposed for public comment amendments to its rules related to the financial statements required to be disclosed by SEC reporting companies or in IPOs in connection with an acquisition or disposal of a business. These proposed rule changes are intended to improve the information that investors receive regarding the acquisition and disposition of businesses, to facilitate more timely access to capital and to reduce complexity and compliance costs.

Continue reading

NASDAQ And NYSE American Shareholder Approval Requirements– Change Of Control

Guest post by Laura Anthony, Esq., Anthony L.G., PLLC

Nasdaq and the NYSE American both have rules requiring listed companies to receive shareholder approval prior to issuing securities in an amount of 20% or more of their outstanding common stock or voting power or prior to completing transactions which will result in a change of control of the company.  Nasdaq Rule 5635 sets forth the circumstances under which shareholder approval is required prior to an issuance of securities in connection with: (i) the acquisition of the stock or assets of another company; (ii) equity-based compensation of officers, directors, employees or consultants; (iii) a change of control; and (iv) transactions other than public offerings (see HERE related to Rule 5635(d)).  NYSE American Company Guide Sections 711, 712 and 713 have substantially similar provisions.

Continue reading

OCIE 2019 Examination Priorities

Guest post by Pillsbury’s Investment Fund Law Team

In a press release issued by the Securities and Exchange Commission on December 20, 2018, the SEC’s Office of Compliance Inspections and Examinations (OCIE) announced its 2019 Examination Priorities.

This year’s examination priorities, although not exhaustive, are divided into 6 categories:

  1. Compliance and risk at registrants responsible for critical market infrastructure;
  2. Matters of importance to retail investors, including seniors and those saving for retirement;
  3. FINRA and MSRB;
  4. Digital assets;
  5. Cybersecurity; and
  6. Anti-money laundering programs.

Read the OCIE 2019 Examination Priorities in full HERE.


Pillsbury Winthrop Shaw Pittman LLP

Pillsbury is an international law firm with a particular focus on the technology & media, energy, financial services, real estate & construction, and travel & hospitality sectors. Recognized by legal research firm BTI Consulting as one of the top 20 firms for client service, Pillsbury and its lawyers are highly regarded for their forward-thinking approach, their enthusiasm for collaborating across disciplines and their unsurpassed commercial awareness. That’s how we have achieved the 12th-highest percentage of Chambers-ranked lawyers among all AmLaw 100 firms.

SEC Divisions’ Issue Public Statement on Digital Assets and ICOs, Echoing Recent Enforcement Actions

Guest post by  – Cleary Gottlieb Steen & Hamilton LLP

On November 16, 2018, the U.S. Securities and Exchange Commission (“SEC”) Division of Corporation Finance (“Corp. Fin.”), Division of Investment Management, and Division of Trading and Markets issued a joint public statement on “Digital Asset Securities Issuance and Trading.”  The public statement is the latest in the Divisions’—and the Commission’s—steady efforts to publicly outline and develop its analysis on the application of the federal securities laws to initial coin offerings (“ICOs”) and certain digital tokens.  These efforts have combined a series of enforcement proceedings with public statements by Chairman Jay Clayton and staff, including a more detailed statement of the SEC’s analytical approach in Corp. Fin. Director William Hinman’s speech on digital assets in June 2018.

Continue reading

Broker-Dealer and Investment Adviser Agrees to Settle SEC Enforcement Action Arising From a Data Security Incident

Guest post by William R. Daugherty and John Busch, Baker & Hostetler LLP

The U.S. Securities and Exchange Commission (SEC) recently announced a consent order settling an enforcement action brought by the SEC against Voya Financial Advisors Inc. (VFA) in connection with a data security incident that occurred in 2016. VFA is a registered broker-dealer and investment adviser with the SEC. The order memorializes the SEC’s agreement to accept $1 million in settlement of the charges alleging that VFA violated both the SEC’s “Safeguards Rule” and “Identify Theft Red Flags Rule.” This was the SEC’s first enforcement action under the Identity Theft Red Flags Rule.

Continue reading

Takeaways from SEC’s First Ever Enforcement Actions Against Cryptocurrency Firms for Failing to Register as a Broker-Dealer and Investment Company

Guest post by Michael S. Dicke and Alexis I. Caloza of Fenwick & West LLP

Over the past year, the U.S. Securities and Exchange Commission has ramped up its scrutiny of cryptocurrencies and other digital token offerings. On Sept. 11, 2018, the SEC escalated its crackdown when it announced a pair of settled enforcement actions against non-issuers participating in the offer and sale of cryptocurrencies it deemed unregistered securities. As with prior cryptocurrency cases, the SEC charged the defendants with offering or selling securities without filing a registration statement or having a valid exemption from registration. However, these cases mark the SEC’s first cryptocurrency enforcement actions against non-issuers for failing to register as broker-dealers and investment companies. As such, they highlight the SEC’s continuing efforts to bring the purchase and sale of cryptocurrencies within a regulated framework, including by targeting third parties who facilitate the purchase and sale of such assets.

Continue reading