The SEC’s Cross-Border Security Swap Rules

Securities Lawyer 101

The Securities and Exchange Commission (the “SEC”) adopted the first of a series of rules and guidance on cross-border security-based swap activities for market participants.

The SEC will use the new rules to finalizing the remaining proposals.

NutraFuels Launches Extreme Energy Spray

COCONUT CREEK, FL, Jul 01, 2014 (Marketwired via COMTEX) — NutraFuels, Inc. (PINKSHEETS: NTFU), a manufacturer of oral spray dietary supplements, announced today that the company plans to launch its latest product, TapoutT XT Extreme Energy Oral Spray in the month of August.

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

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 seven counts of mail fraud and two counts of securities fraud. Richard Plato, the owner of Momentum Production Corp. of Baytown, allegedly

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

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 must tag their financial data using

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.

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

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.

 

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

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”.

The SEC’s Proxy Rules

Most public companies hold a stockholders’ meeting annually and hold special meetings to vote on special corporate actions such as name changes and mergers.  Shareholder voting on takes place either in person or by proxy.

Proxy solicitation is governed by a number of rules and regulations including: (i) state corporate law; (ii) stock exchange listing requirements; (iii) SEC

Sponsoring Market Makers In Going Public Transactions

One step in going public transactions is obtaining a stock trading or ticker symbol from theFinancial Industry Regulatory Authority (“FINRA”). For a company to obtain a ticker, a sponsoring market maker must submit an application on Form 211 on the issuer’s behalf to the FINRA.

Sponsoring markets makers have become one of the  most important players in the going public process because they are the only ones who can apply for a ticker symbol.

Market Maker Registration

Canadian Multijurisdictional Disclosures In Going Public Transactions

The Multijurisdictional Disclosure System (“MJDS”) was adopted in July 1991 by the U.S. Securities and Exchange Commission (“SEC”) and the Canadian Securities Administrators to facilitate cross-border public offerings of securities between the U.S. and Canada. The Multijurisdictional Disclosure System provides Canadian issuers with attractive options for accessing the U.S. capital markets in their going public transactions.

In many going public transactions, Canadian issuers can register their securities offerings in the U.S. using a Canadian prospectus, in accordance with Canadian disclosure requirements.   Further,

Going Public Transactions l SEC Registration Statements

Private Issuers can undergo a going public transaction with a registration statement (“Registration Statement”) under the Securities Act of 1933, as amended (the Securities Act”). The issuer files a Registration Statement with the SEC, typically on Form S-1 registering securities it plans to sell or securities held by its shareholders (“Selling Shareholders”).

The Securities and Exchange Commission (the “SEC”) reviews and often comments on the disclosures provided in the Registration Statement.

The SEC will declare the Registration Statement

Rule 504 Insights

Rule 504 of Regulation D (“Rule 504″) is a transactional exemption from the registration Statement requirements of the Securities Act of 1933, as amended (the “Securities Act”) for non-reporting companies when they offer and sell securities.  OTC Pink Sheet companies often rely upon Rule 504 to offer and sell their securities.

Rule 504 Eligibility

Rule 144 Insights

The Securities Act of 1933, as amended (the “Securities Act”) requires the offer and sale of securities to be registered under the Securities Act, unless the security or transaction qualifies for an exemption from registration. Rule 144 of the Securities Act provides a safe harbor that permits holders of “restricted securities” to resell their securities publicly if the holder complies with specific conditions. In order to remove the legend from certificates representing shares being resold in reliance upon Rule 144, an opinion from an SEC attorney is required.

Rule 144 also applies to the public sale of any securities held by