Tuesday, April 29, 2014

Securities Lawyers Gone Wild l Three-Time Felon & Lawyer Indicted

Securities Lawyer 101 Blog On April 6, 2014, Texas attorney Richard Plato was  indicted  for mail fraud and securities fraud. Plato is a disbarred attorney who has been convicted in three separate criminal cases, including money laundering and wire fraud in the collapse of a large Florida insurer.   The indictment of Plato by a Texas grand jury is for... Read More
http://www.securitieslawyer101.com/richard-plato/

International Businessman Pleads Guilty to Scamming Investors

Securities Lawyer 101 Blog On April 8, 2014, Sven Erik Ulsteen, a former executive and shareholder of a Channel Islands company named Anturion Limited, pled guilty to fraudulently using counterfeit and forged securities to take over $2 million from ...
http://www.securitieslawyer101.com/anturion-limited/

Securities Lawyers Gone Wild l Three-Time Felon & Lawyer Indicted In Scheme

Securities Lawyer 101 Blog On April 6, 2014, Texas attorney Richard Plato was  indicted  for mail fraud and securities fraud, Plato is a disbarred attorney who has been convicted in three separate criminal cases, including money laundering and wir...
http://www.securitieslawyer101.com/richard-plato/

Fund Manager Brian Callahan Pleads Guilty In $96 Million Ponzi Scheme

On April 29, 2014, Brian Callahan, 44, pleaded guilty to one count of securities fraud and one count of wire fraud for operating a $96 million Ponzi scheme through his various offshore investment funds. Pursuant to his plea agreement with the government, Callahan has agreed to the forfeiture of $67.4 million, which includes proceeds from the sale of his former... Read More
http://www.securitieslawyer101.com/brian-callahan/

Fund Manager Brian Callahan Pleads Guilty In $96 Million Ponzi Scheme

On April 29, 2014, Brian Callahan, 44, pleaded guilty to one count of securities fraud and one count of wire fraud for operating a $96 million Ponzi scheme through his various offshore investment funds. Pursuant to his plea agreement with the governm...
http://www.securitieslawyer101.com/brian-callahan/

Sunday, April 27, 2014

Pointers for Going Public With a Direct Public Offering

Securities Lawyer 101 Blog More and more issuers going public opt for a direct public offering. In a direct public offering management sells shares of the company s stock directly to investors, rather than through the efforts of an underwriter. A direct public offering eliminates costs and risks associated with reverse merger transactions. Companies using a direct public offering should consider... Read More
http://www.securitieslawyer101.com/direct-public-offering-2/

Thursday, April 24, 2014

SEC Charges Chris Choi & Poker Player Danny Kuo l Posted by Brenda Hamilton Attorney

On April 23, 2014, the Securities and Exchange Commission(the “SEC”) filed insider trading charges against a former accounting manager at Nvidia Corp. who tipped a friend with confidential company information that set in motion a chain of tipping and illegal trading among a network of hedge fund traders who reaped millions of dollars in illicit gains.  The

Wednesday, April 23, 2014

SEC Obtains Preliminary Injuntion Against John Babikian

Securities Lawyer 101 Blog On April 20, 2014, the Securities and Exchange Commission (the SEC ) was granted an injunction imposing an asset freeze against penny stock promoter, John Babikian.  Babikian is charged with securities fraud.  The Court stated, There is a high risk that, unless enjoined, Babikian may commit the alleged fraudulent acts again, given his control of penny stock... Read More
http://www.securitieslawyer101.com/sec-obtains-preliminary-injuntion-john-babikian/

SEC Charges Robert J. Vitale l Posted by Brenda Hamilton Attorney

Securities Lawyer 101 Blog On April 23, 2014, the Securities and Exchange Commission (the SEC ) filed fraud charges against a former Florida-based stock promoter currently serving a two-year prison sentence for lying to SEC investigators.   The SEC’s complaint filed in U.S. District Court in the Southern District of Florida alleges that Robert J. Vitale defrauded investors, sold unregistered securities, and acted as... Read More
http://www.securitieslawyer101.com/vitale/

SEC Charges Chris Choi & Poker Player Danny Kuo l Posted by Brenda Hamilton Attorney

On April 23, 2014, the Securities and Exchange Commission(the SEC ) filed insider trading charges against a former accounting manager at Nvidia Corp. who tipped a friend with confidential company information that set in motion a chain of tipping and illegal trading among a network of hedge fund traders who reaped millions of dollars in illicit gains.  The SEC alleges that Chris Choi... Read More
http://www.securitieslawyer101.com/danny-kuo/

SEC Issues Stop Order For Comp Service’s Registration Statement l By: Brenda Hamilton

On April 23, 2014, the Securities and Exchange Commission (the SEC )  issued a stop order to prevent a Northern California-based company from issuing stock after including false and misleading information in its amended registration statement for an initial public offering (IPO).   The registration statement was opined upon by Greg Jaclin, a securities attorney.  According to the SEC’s stop order against Comp Services Inc.,... Read More
http://www.securitieslawyer101.com/registration-statement-stop/

SEC Issues Stop Order For Comp Service's Registration Statement l By: Brenda Hamilton

On April 23, 2014, the Securities and Exchange Commission (the "SEC")  issued a stop order to prevent a Northern California-based company from issuing stock after including false and misleading information in its amended registration statement fo...
http://www.securitieslawyer101.com/registration-statement-stop/

SEC Issues Stop Order For Comp Service's Registration Statement l By: Brenda Hamilton

On April 23, 2014, the Securities and Exchange Commission (the "SEC")  issued a stop order to prevent a Northern California-based company from issuing stock after including false and misleading information in its amended registration statement fo...
http://www.securitieslawyer101.com/registration-statement-stop/

SEC Charges Chris Choi & Poker Player Danny Kuo l Posted by Brenda Hamilton Attorney

On April 23, 2014, the Securities and Exchange Commission(the "SEC") filed insider trading charges against a former accounting manager at Nvidia Corp. who tipped a friend with confidential company information that set in motion a chain of tipping an...
http://www.securitieslawyer101.com/danny-kuo/

SEC Charges Chris Choi & Poker Player Danny Kuo l Posted by Brenda Hamilton Attorney

On April 23, 2014, the Securities and Exchange Commission(the "SEC") filed insider trading charges against a former accounting manager at Nvidia Corp. who tipped a friend with confidential company information that set in motion a chain of tipping an...
http://www.securitieslawyer101.com/danny-kuo/

Tuesday, April 22, 2014

SEC Charges Hedge Fund Manager l Brenda Hamilton Attorney

On April 4, 2014, the Securities and Exchange Commission filed suit in United States District Court in Dallas, Texas, alleging that, from October 2009 to June 2012, Matthew D. Sample of San Diego, California used his hedge fund to raise almost $1 million from five investors based on representations

Monday, April 21, 2014

SEC Issues Guidance on Rule 147 Intrastate Offerings & Crowdfunding l Brenda Hamilton Attorney

On April 10, 2014, the Securities and Exchange Commission (the “SEC”) issued a revised compliance and disclosure interpretation (“C&DIs”) and provided two new questions concerning  crowdfunding under the JOBS Act and the intrastate exemption provided by Rule 147 under the Securities Act of 1933, as amended (the “Securities Act”). Section 3(a)(11) of the Securities Act provides an exemption from the... Read More
http://www.securitieslawyer101.com/intrastate-offerings/

SEC Issues Guidance on Rule 147 Intrastate Offerings & Crowdfunding l Brenda Hamilton Attorney

On April 10, 2014, the Securities and Exchange Commission (the “SEC”) issued a revised compliance and disclosure interpretation (“C&DIs”) and provided two new questions concerning  crowdfunding under the JOBS Act and the intrastate exemp...
http://www.securitieslawyer101.com/intrastate-offerings/

FINRA Issues $8 Million Fine for Anti-Money Laundering Compliance Failures

Securities Lawyer 101 Blog The Financial Industry Regulatory Authority (FINRA) announced today that it has fined New York-based Brown Brothers Harriman & Co. (BBH) $8 million for substantial anti-money laundering compliance failures including, among other related violations, its failure to have an adequate anti-money laundering program in place to monitor and detect suspicious penny stock transactions. BBH also failed to sufficiently investigate potentially suspicious penny stock activity brought to the firm’s attention and did not fulfill its Suspicious Activity Report (SAR) filing requirements.
In addition, BBH did not have an adequate supervisory system to prevent the distribution of unregistered securities. BBH’s former Global AML Compliance Officer Harold Crawford was also fined $25,000 and suspended for one month.
Penny stock transactions pose heightened risks because low-priced securities may be manipulated by fraudsters. FINRA found that from Jan. 1, 2009, to June 30, 2013, BBH executed transactions or delivered securities involving at least six billion shares of penny stocks, many on behalf of undisclosed customers of foreign banks in known bank secrecy havens. BBH executed these transactions despite the fact that it was unable to obtain information essential to verify that the stocks were free trading. In many instances, BBH lacked such basic information as the identity of the stock’s beneficial owner, the circumstances under which the stock was obtained, and the seller’s relationship to the issuer. Penny stock transactions generated at least $850 million in proceeds for BBH’s customers.
Brad Bennett, FINRA Executive Vice President, Enforcement, said, “The sanction in this case reflects the gravity of Brown Brothers Harriman’s compliance failures. The firm opened its doors to undisclosed sellers of penny stocks from secrecy havens without regard for who was behind those transactions, or whether the stock was properly registered or exempt from registration. This case is a reminder to firms of what can happen if they choose to engage in the penny stock liquidation business when they lack the ability to manage the risks involved.”
FINRA also found that although BBH was aware that customers were depositing and selling large blocks of penny stocks, it failed to ensure that its supervisory reviews were adequate to determine whether the securities were part of an illegal unregistered distribution. FINRA Regulatory Notice 09-05 discusses “red flags” that should signal a firm to closely scrutinize transactions to determine whether the stock is properly registered or exempt from registration, or whether it is being offered illegally. BBH customers deposited and sold penny stock shares in transactions that should have raised numerous red flags. In concluding these settlements, BBH and Crawford neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA’s Disciplinary Actions Online database.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton Florida, (561) 416-8956, by email atinfo@securitieslawyer101.com or visit www.securitieslawyer101.com.
This securities law blog post is provided as a general informational service to clients and friends ofHamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490Rule 506 private placement offerings and memorandums,Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 ,IPO’s, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or info@securitieslawyer101.com. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com

Reverse Mergers l The Game Changers

Shell brokers continue to tout the virtues of reverse merger transactions, despite recent rule changes that eliminate many if not all of the benefits once conferred by them. Seeking to persuade clients to use their services, these promoters often securities lawyers hark back to the glory days of the reverse

Prospectus Disclosure Requirements in Going Public Transactions

Private companies which offer and sell their securities to the public before completion of a going public transaction are subject to the same requirements under the Securities Act of 1933, as amended (the “Securities Act”) as public companies who securities to the public. Section 5 of the 1933 Act provides that an issuer may not use the mails or other means of interstate commerce to offer or sell its securities unless a registration statement is in effect under the Securities Act.

Anthonie R. Sparrow Sentenced in $16 million Scheme

On February 25, 2014, the FBI announced that Anthonie R. Sparrow pled guilty for his role in perpetrating a $16 million securities fraud scheme that victimized hundreds of investors around the world. Sparrow was charged in December 2009 and extradited from Spain.

George Louis Theodule Sentenced to 150 Months

On February 26, 2014, the United States Attorney for the Southern District of Florida and Federal Bureau of Investigation (FBI), announced the unsealing of an indictment charging George Louis Theodule, former resident of Wellington, Florida. Theodule was charged with multiple counts of wire fraud, securities fraud, and money laundering. Theodule was arrested on August 23, 2013, and had his initial appearance before U.S. Magistrate Judge Dave Brannon later that morning.
According to the indictment, Theodule engaged in an investment

Contemporaneous Private & Public Offerings l By Brenda Hamilton Attorney

Issuers often require capital during the going public process for their operations until their registration statement on Form S-1 is declared effective.  The SEC’s integration doctrine addresses the circumstances under which an issuer can raise capital privately while a registration statement is pending for a public offering.
The integration doctrine under was created to prevent companies from improperly avoiding

Form 3, 4 & 5 Filing Requirements l By: Brenda Hamilton Attorney

Upon completion of a going public transaction, officers, directors and certain shareholders have new rules and regulations they must comply with. These include the filing of beneficial ownership reports on Forms 3, 4 & 5. Each officer, director and 10% shareholder of a company with a class of securities registered under the Securities Act of 1934 must file a Form 3 disclosing the number of shares of the public company’s common stock he or she beneficially holdss.

The SEC’s Electronic Data Gathering and Retrieval System

Securities Lawyer 101 Blog l Brenda Hamilton AttorneyMost documents filed with the Securities and Exchange Commission (the “SEC”), are required to be filed electronically using the SEC’s Electronic Data Gathering and Retrieval system (“EDGAR”). Additionally, public companies filing on EDGAR must tag their financial data using

Sunday, April 20, 2014

The SEC’s Electronic Data Gathering and Retrieval System

Most documents filed with the Securities and Exchange Commission (the “SEC”), are required to be filed electronically using the SEC’s Electronic Data Gathering and Retrieval system (“EDGAR”). Additionally, public companies filing on EDGAR m...
http://www.securitieslawyer101.com/sec-edgar/

The SEC’s Electronic Data Gathering and Retrieval System

Most documents filed with the Securities and Exchange Commission (the “SEC”), are required to be filed electronically using the SEC’s Electronic Data Gathering and Retrieval system (“EDGAR”). Additionally, public companies filing on EDGAR m...
http://www.securitieslawyer101.com/sec-edgar/

The SEC’s Electronic Data Gathering and Retrieval System

Most documents filed with the Securities and Exchange Commission (the “SEC”), are required to be filed electronically using the SEC’s Electronic Data Gathering and Retrieval system (“EDGAR”). Additionally, public companies filing on EDGAR m...
http://www.securitieslawyer101.com/sec-edgar/

Form 3, 4 & 5 Filing Requirements l By: Brenda Hamilton Attorney

Securities Lawyer 101 Blog Upon completion of a going public transaction, officers, directors and certain shareholders have new rules and regulations they must comply with. These include the filing of beneficial ownership reports on Forms 3, 4 & 5. Each officer, director and 10% shareholder of a company with a class of securities registered under the Securities Act of 1934... Read More
http://www.securitieslawyer101.com/form-3/

Thursday, April 17, 2014

Securities Attorneys Gone Wild l John Briner

On Securities Lawyer101 l Brenda Hamilton AttorneyFebruary 3, 2014, the Securities and Exchange Commission (the “SEC”) announced the filing of stop order proceedings against 20 purported mining companies for providing false information in their registration statements. Of the 20 registration statements, 18 were opined upon by the same attorney, Diane Dalmy, who is the subject of a pending SEC proceeding. Additionally, in June and July of last year, 17 of these 20 issuers subject to the registration

Donna Levy Sentenced

On February 19, 2014, Donna Levy was was sentenced to 60 months in connection with her conviction for Conspiracy to Commit Securities Fraud and Manipulation for Hire on Counts and 66 months for Securities Fraud concerning Banneker, Cardiac Networks to run concurrently. In criminal cases when

Crowdfunding Confusion

Crowdfunding is a term used to describe an evolving method of raising money through the Internet.While crowdfunding can be used to raise funds for many things, it generally has not been used as a means to offer and sell securities.This has caused some confusion about the legality of crowdfunding for some market participants.

Disclosure Controls and Procedures l Brenda Hamilton Attorney

To back up the officer and director certifications in periodic reports, issuers must establish and maintain a system of disclosure controls and procedures designed to ensure that the company records, processes, summarizes and discloses on a timely basis information required to be disclosed in 1934 Act filings.
Issuers must evaluate on a quarterly basis the effectiveness of their disclosure controls and procedures. The requirement that an issuer have disclosure controls and procedures  extends

Investment Adviser’s Use of Testimonials From Social Media l By: Brenda Hamilton Attorney


http://www.securitieslawyer101.com/investment-adviser/

Wednesday, April 16, 2014

SEC Shuts Down Pyramid Scheme Using Phony Companies l Securities Lawyer 101

On March 5, 2014, the Securities and Exchange Commission (the “SEC”) announced an emergency enforcement action to stop a fraudulent pyramid scheme by phony companies masquerading as a legitimate international investment firm.The SEC has obtained a

DTC Chills: A Big Conspiracy or Fraud l Securities Lawyer 101Blog

The Depository Trust Company (DTC) is the only stock depository in the United States.When DTC provides services as the depository for an issuer’s securities, its securities can trade electronically. Without DTC eligibility, it is almost impossible for an issuer to establish an active market in its stock. Issuers must satisfy specific criteria

OTC Markets Reporting l Securities Lawyer 101

Unlike securities listed on stock exchanges such as NASDAQ or the NYSE, securities may trade through the OTCMarkets interdealer quotation system whether they are Securities and Exchange Commission (“SEC”) reporting issuer or not.
There are three reporting standards for companies quoted

SEC Charges Dewey & LeBoeu Executives with Securities Fraud

On March 6, 2014, the Securities and Exchange Commission (the “SEC”) announces charges against five executives at Dewey & LeBoeuf,and finance professionals. They are are accused of facilitating a $150 million fraudulent bond offering by Dewey & LeBoeuf, the international law firm where they worked. The SEC alleges that the five turned to accounting fraud when the firm needed money to weather the economic recession and steep costs from a merger.
Fearful that declining revenue might cause its bank lenders to cut off

SEC Announces Trading Suspension of Aventura Equities

On March 5, 2014, the Securities and Exchange Commission (the “SEC”) announced the temporary trading suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading in the securities of Aventura Equities, Inc.(“Aventura”) commencing at 9:30 a.m. EST on

Direct Public Offerings l Registration Statements l Securities Lawyer 101

Private companies seeking to go public often use a direct public offering (“Direct Public Offering”).  Unlike an Initial Public Offering (“IPO”), a Direct Public Offering allows an

SEC Registration Statement Attorney l 2014 Q & A l Securities Lawyer 101

The new rules under the JOBS Act have increased interest in going public transactions and SEC registration statements as part of the capital raising process.  This blog post addresses some of the most common questions we are asked as registration statement attorneys about Form S-1 and direct public offerings..

Securities Lawyers Gone Wild l Russell Adler Charged

On March 7, 2014, Russell Adler, a former name partner in Scott Rothstein’s now-defunct law firm was criminally charged for funneling illegal campaign contributions to Senator John McCain and Florida gubernatorial candidate Charlie Crist.  Adler was charged with a single count of conspiracy to violate

Use of Form S-1 Proceeds In SEC Registration Statements l Securities Lawyer 101

Companies going public have several options in how to structure their transaction when registering securities with the Securities and Exchange Commission (“SEC”).  They can seek to raise capital using the registration or they can simply register shares on behalf of existing shareholders.  If the

SEC Settles Securities Fraud Charges Against Alexander Mascioli After Winnebago Offer

On March 19, 2014, the Securities and Exchange Commission (the “SEC”) filed settled securities fraud charges in the United States District Court for the District of Connecticut against Alexander H.G. Mascioli and his alter-ego, purported hedge fund, North Street Capital, LP (“NSC”).

SEC Continues Trading Suspensions to Prevent Custodianship Fraud

On March 21, 2014, the Securities and Exchange Commission (the “SEC”) announced the trading suspension of trading of the following issuers, commencing at 9:30 a.m. EDT on March 20, 2014 and terminating at 11:59 p.m. EDT on April 2, 2014:
· IVI Communications, Inc. (IVII)

SEC Suspends Citadel After Pumps and Dumps Report

On March 21, 2014, the Securities and Exchange Commission issued a trading suspension pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading in the securities of Citadel EFT, Inc. (“Citadel”), of Oceanside, California.
The SEC suspended trading in the securities of Citadel because of

Section 15(d) Reporting l Securities Lawyer 101

Upon completion of a going public transaction, an issuer that has registered equity or debt securities in an initial or direct public offering registered on Form S-1 under the Securities Act of 1933, as amended (the “Securities Act”) must file annual, quarterly and current reports with the Securities and Exchange

Section 302 and 906 Certifications l Brenda Hamilton Attorney

Chief Executive Officers (“CEO”) and Chief Financial Officers (“CFO”) of public companies must certify the issuer’s annual report on Form 10-K and quarterly report on Form 10-Q. Each issuer must also have disclosure controls and procedures and internal control over financial reporting.
The issuer’s CEO and CFO are each required to make two certifications in the issuer’s Form 10-Q and 10-K

Tuesday, April 15, 2014

OTCQB Adopts Listing Fees & Listing Requirements

OTC Markets Group has announced it is making significant changes to its OTCQB.  Companies seeking to be quoted on the OTCQB will be required to meet eligibility standards and pay an initial listing fee of $2,500 to the OTC Markets if not listed on t...
http://www.securitieslawyer101.com/otcqb/

Monday, April 14, 2014

Form S-1 Risk Factor Disclosures l Securities Lawyer 101

The Securities Act of 1933 is often called the “truth in securities” law.It has two basic objectives: to require that investors receive financial and other important information about securities being offered for sale, and to prohibit deceit, misrepresentation, and other fraud in the sale of securities.
 
When an issuer files a Form S-1, it must provide disclosures about its business plan, its operating history, financial statements and risk factors. Risk factors are a primary part of Form S-1 registration statement disclosures.Item 503 of

Summary Financial Information in Form S-1 Registration Statements l Securities Lawyer 101

Under the JOBS Act, an Emerging Growth Company may provide two years of summary financial data in its SEC registration statement or for the period from the date of the company’s inception, if shorter, and any interim periods that are included in the financial statements.
 
Registration statement attorneys should stress to issuer’s going public that the purpose of Selected Financial Information in the Form S-1 or other Registration Statement is to highlight certain significant information and trends of the issuer’s financial condition and operations.
 
Summary  financial information is derived from financial

XBRL Interactive Data l Securitis Lawyer 101

The use of eXtensible Business Reporting Language (XBRL) interactive data is intended to improve the accessibility of financial information to investors by making the information inexpensive and easier to use.  XBRL interactive data uses a standardized set of tags to consistently identify data in embedded text.  Issuers must identify each piece of data in its financial statements according to a standard list of tags assigned to the particular type of data.  Using XBRL, the issuer must “tag” financial information so that software applications will automatically recognize the information.

By tagging the information, investors and shareholders are able to locate, download and

Ask Go Public 101 l OTC Pink Sheet l Q & A

Q. What are the benefits of  listing on the OTCMarkets OTC Pink Sheets?
 
A.  There are a couple of benefits for companies opting to list on the OTC Pink Sheets.
Pink Sheet listings are much less expensive and the disclosure requriements are less stringent than a listing on the OTCMarkets OTCQB because audited financial statements are not required.  Despite that audited financial statements are not required, issuers who publish the information required by the OTCMarkets Pink Sheet Disclosure Guideslines provide transparency to investors and comply with SEC Rule 15c-211.
 

Going Public Insights l 2014

There have always been multiple ways that a private company could obtain public company status. In 2013, changes resulting from the JOBS Act, made going public transactions an appealing option for private companies seeking to raise capital. Rule 506(c) allows companies to conduct private placements prior to going public to offset their going public costs. In going public transactions, these privately placed shares are registered on Form S-1 and become the public float.
 
One traditional method of going public remains an Initial Public Offering (“IPO”).  The  IPO is rarely used by small companies as most will not  meet the

Sunday, April 13, 2014

Forms 10-K Deadlines l Securities Lawyer 101

Securities Lawyer 101 Blog A public company must file an annual report on Form 10-K following the end of each of its fiscal year. The first Form 10-K deadline is 90 days after the end of the first fiscal year in which the issuer becomes subject to the periodic reporting requirements of the 1934 Act. After the first year the Form 10-K deadline depends... Read More
http://www.securitieslawyer101.com/form-10-k-deadlines/

Saturday, April 12, 2014

Using Form S-1 To Go Public l Brenda Hamilton Attorney

Securities Lawyer 101 Blog Form S-1 is the basic registration statement form used to register securities. Form S-1 can be used to register securities for which no other form is authorized or prescribed, except securities of foreign governments or political sub-divisions thereof. Form S-1 is commonly the first form of SEC registration statement used by issuers during the going public... Read More
http://www.securitieslawyer101.com/form-s1/

U.S. Indicts Carribbean Money Laundering Operators

Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for conspiracy to launder monetary instruments, the Department of Justice and Internal Revenue Service (IRS) announced on March 24, 2014.  The indict...
http://www.securitieslawyer101.com/money-laundering/

U.S. Indicts Carribbean Money Laundering Operators

Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for conspiracy to launder monetary instruments, the Department of Justice and Internal Revenue Service (IRS) announced on March 24, 2014.  The indict...
http://www.securitieslawyer101.com/money-laundering/

Thursday, April 10, 2014

The Law of Going Public

A private company going public is subject to three federal securities laws, each with its own unique requirements.  The three laws are the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”) and the Sarbanes-Oxley Act of 2002 (”Sarbanes-Oxley”).
In addition to the federal securities laws, companies going public are subject to state securities regulation of their securities public and private offerings.  The Securities Act sets forth the regulations that govern the offer and sale of securities by an issuer and certain shareholders.

The Securities Act governs both private offerings such as those
conducted under Regulation D and public offerings such as those

Form 10 Registration Statements l The Securities Exchange Act of 1934

After completion of a going public transactions public companies may become subject to the Securities and Exchange Commission’s (“SEC”) reporting requirements.  All Companies whose securities are registered on a national securities exchange, and generally issuers  whose assets exceed $10,000,000 with a class of equity securities held by 500 or more persons, must register their securities under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act” or the “1934 Act”).  Companies can also elect to become subject to the 1934 Act’s reporting requirements by filing a Form 8A or Form 10 Registration Statement pursuant to Section 12(g) of the 1934 Act.

A 1934 Act registration statement requires disclosure of material

SEC Comments 101 l Securities Lawyer 101

Securities offerings are regulated by the Securities Act of 1933, as amended, (the “Securities Act”).  Section 5 of the Securities Act requires that securities offerings be registered with the Securities and Exchange Commission (the “SEC”) or be exempt from the SEC’s registration requirements.

Private companies seeking to go public are often unaware of the SEC comment process. The SEC comment process applies to registration statements filed by companies who go public using an initial public offering (“IPO”) as well as to companies conducting a direct public offering.

The S-1 Registration Statement Process                 

In order to register securities with the SEC, issuers must file a registration statement with the SEC. Typically private companies

Wednesday, April 9, 2014

The Curious Case of Irwin Boock l Corporate Hijackings 101

Securities Lawyer 101 Blog The Irwin Boock corporate hijacking case is a gift that keeps on giving.  The Securities and Exchange Commission (“SEC”)  brought its original action against Boock and his associates in September 2009; since then several parallel actions have been filed.  On September 27, 2013, the SEC announced that Nicolette Loisel, a Houston-area attorney, had agreed to settle.  Loisel... Read More
http://www.securitieslawyer101.com/irwin-boock/

Beware of False Claims of SEC Registration Statements l Securities Lawyer 101

Securities Lawyer 101 Blog The SEC issued a recent investor alert  to warn the public about potentially fraudulent investment schemes that involve individuals or firms misrepresenting that they have filed registration statements with the SEC. Investors should be careful to check the background, including license and registration statement status, of any person who tries to sell them an investment product... Read More
http://www.securitieslawyer101.com/registration-statements-2/

Direct Public Offering Checklist

For companies that have a reasonable time schedule for going public, a direct public offering provides an appealing option.  In direct public offering, a company’s shares are sold directly to investors by management, rather than through an underwriter.   A direct public offering dramatically reduces the costs and risks associated with a reverse merger.  Companies using a direct public offering in their going public transaction should consider these pointers.

Stockholders Requirements in Direct Public Offerings.

The Financial Industry Regulatory Authority (“FINRA”) requires that a company’s securities develop an orderly and liquid market.  To meet this requirement you must have a shareholder base of at least 20 non-affiliated stockholders who have somewhat

SEC Charges Hedge Fund Manager l Securities Lawyer 101 Blog

On April 4, 2014, the Securities and Exchange Commission filed suit in United States District Court in Dallas, Texas, alleging that, from October 2009 to June 2012, Matthew D. Sample of San Diego, California raised almost $1 million from five investors based on representations that he would use their money to trade on the investors’ behalf. Instead, the Commission alleges that he fraudulently
diverted approximately one-third of the money for his personal use and to make payments to other

SEC Charges Ponzi Scheme Operator Using YouTube l Securities Lawyer 101

On April 8, 2014, the Securities and Exchange Commission announced fraud charges and an asset freeze against the operators of a South Florida-based Ponzi scheme targeting investors through YouTube videos and selling them investments in a product called virtual concierge machines (VCMs)
that would purportedly generate guaranteed returns of 300 to 500 percent in four years.  In a parallel

Pocket Games Form S-1 Registration Statement Is Effective l Securities Lawyer 101

Pocket Games, Inc., a mobile game developer, announced today that the Company’s Form S-1 registration statement has been declared effective
by the Securities Exchange Commission (the “SEC”). Pocket Games, Inc is now a reporting company

Tuesday, April 8, 2014

SEC Charges Ponzi Scheme Operator Using YouTube l Securities Lawyer 101

Securities Lawyer 101 Blog On April 8, 2014, the Securities and Exchange Commission announced fraud charges and an asset freeze against the operators of a South Florida-based Ponzi scheme targeting investors through YouTube videos and selling them investments in a product called virtual concierge machines (VCMs) that would purportedly generate guaranteed returns of 300 to 500 percent in four years.  In a... Read More
http://www.securitieslawyer101.com/joseph-signore/

Direct Public Offerings and Alternative Going Public Structures

Private companies seeking to go public often use a direct public offering (“Direct Public Offering”).  Unlike an Initial Public Offering (“IPO”), a Direct Public Offering allows an issuer to sell its shares

Sponsoring Market Makers And Going Public

The last step in going public transactions is most often obtaining a stock trading or ticker symbol from the Financial Industry Regulatory Authority (“FINRA”). For a company to obtain a ticker, a market maker must submit a Form 211 on the issuer’s behalf to the Finance Industry Regulatory Authority (“FINRA”). This last step is required of all companies including those filing Form S-1 registration statements with the SEC.
Only a Market Maker can submit a Form 211 to obtain a

Securities Registration and the Emerging Growth Company

If a private company undertakes a public offering, the Securities Act of 1933, as amended (the “1933 Act”) requires the private company to file a registration statement with the SEC before it may offer its securities for sale to the public. The registered offering can be a direct public offering for a company that chooses to go public directly or an initial public offering (“IPO”) for  company conducting an underwritten public offering.
The company may not sell the securities covered

Form 10-Q Quarterly Reports

Public companies with a class of securities registered under Section 12 or subject to Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are subject to the periodic and current reporting requirements of Section 13 or 15(d) of the Securities Exchange Act. The Exchange Act contains ongoing disclosure requirements that provide investors with current information on an ongoing basis. These include an obligation to file periodic reports on Form 10-K and Form 10-Q and current reports on Form 8-K with the Securities and Exchange Commission (the “SEC”).

Form 10-Q is required for specified events and the reports on the form must comply with a variety of SEC disclosure

The Securities Exchange Act of 1934

The Securities Exchange Act of 1934 (the “1934 Act”) grants broad authority to the Securities and Exchange Commission (“SEC”) to oversee the securities industry. The SEC’s authority includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies; as well as securities self regulatory organizations (SROs), including the  Financial Industry Regulatory Authority (“FINRA”).
In addition, the New York Stock Exchange, the NASDAQ Stock Market, and the Chicago Board of Options Exchange are all subject to regulation under the 1934 Act.

Concurrent Private and Public Offerings

Issuers often require capital during the going public process for their operations until their registration statement on Form S-1 is declared effective.  The SEC’s integration doctrine addresses the circumstances under which an issuer can raise capital while a registration statement under the Securities Act of 1933, as amended is pending.
The integration doctrine under was created to prevent companies from improperly avoiding registration by dividing a single securities offering into multiple offerings to take advantage of Securities Act exemptions that would not be available for the combined offering.  The SEC has

The Securities Attorney’s Review of Documents in Going Public Transactions

The securities laws require companies to provide disclosures during the going public process. These disclosure requirements apply to private companies going public on national securities exchanges and the OTCMarkets alike. These disclosures are typically provided on a Form S-1 registration statement.  In the going public process, issuers must generally disclose information about their business operations, financial condition, risks, management, litigation and shareholders, in addition to how many shares will be offered and at what price.
The securities lawyer’s role in the going public process varies, depending upon the size of the company, its type of business, its assets, revenues, location and other factors. Most importantly, the role is defined by whether the issuer files a registration

Securities Registration Statements in the Going Public Process

Many companies file a registration statement filing with the SEC in connection with their going public transaction.  The most commonly used registration statement form is Form S-1.
All companies may register securities on a Form S-1 registration statement. Private companies going public should be aware of the expansive disclosure

Seed Stockholders In Going Public Matters

The going public process involves a number of steps that vary depending on the characteristics of the private company wishing to go public, and whether it will become a Securities and Exchange Commission (“SEC”) reporting issuer.
All companies seeking public company status must meet certain requirements in order for their securities to be publicly traded. One requirement is that the issuer obtain sufficient shareholders to establish a trading market. These initial shareholders are known as “Seed Shareholders”.