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The Securities Edge Securities Blog for Middle-Market Companies

Tag Archives: Gregory K. Bader

Despite First Amendment concerns, the conflict minerals rule is here to stay

Posted in Disclosure Guidance

A few months ago, the U.S. Court of Appeals for the D.C. Circuit upheld portions of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, known as the “conflicts mineral rule.” The rule, enacted by Congress in July of 2010,requires certain public companies to provide disclosures about the use of specific conflict… Continue Reading

Bank Secrecy Act: Broker-Dealers Must Also Comply

Posted in Financial Institutions

Generally speaking, the Bank Secrecy Act (“BSA”) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. But while anyone can imagine that the BSA and its implementing regulations apply to those entities we typically classify as “financial institutions” such as banks and other depository institutions, it… Continue Reading

Volcker Rule exception for trust preferred securities: A break for banks or a sign of uncertainty?

Posted in Financial Institutions

In a joint press release issued on January 15, 2014, five federal agencies indicated their approval of an interim final rule to permit banking entities to retain interests in collateralized debt obligations backed primarily by trust preferred securities (“TruPS CDOs”).  These interests would have otherwise been prohibited under the new Volcker Rule, which prohibits certain… Continue Reading

Protect your Board from merger and acquisition lawsuits with these five critical considerations

Posted in Mergers and Acquisitions

For a board of directors of a company, perhaps no decision is as important (and litigious) as the sale of the company in a change-of-control transaction. Shareholder lawsuits aimed at merger and acquisition (“M&A”) transactions (usually in the form of a putative shareholder class action or derivative suit) often allege that the directors of the… Continue Reading

It was me! SEC to toss "neither admit nor deny" policy in certain cases

Posted in SEC Enforcement

SEC Chair Mary Jo White has indicated that the SEC will require that, in certain cases, admissions be made as a condition of settling rather than permitting the defendant to “neither admit nor deny” the allegations in the complaint of its enforcement action.  The move marks a departure from the typical practice at the SEC… Continue Reading

It was me! SEC to toss “neither admit nor deny” policy in certain cases

Posted in SEC Enforcement

SEC Chair Mary Jo White has indicated that the SEC will require that, in certain cases, admissions be made as a condition of settling rather than permitting the defendant to “neither admit nor deny” the allegations in the complaint of its enforcement action.  The move marks a departure from the typical practice at the SEC… Continue Reading

Uniform fiduciary standard for broker-dealers and investment advisers? Proceed with caution!

Posted in Financial Institutions

When managing investments and strategies for personal financial goals, retail investors often seek guidance from their investment advisers, and on an increasing basis, from their broker-dealers.  Broker-dealers and investment advisers are regulated extensively, but the regulatory requirements differ.  Broker-dealers and investment advisers are also subject to different standards under federal law when providing investment advice… Continue Reading

Continued increased enforcement of Foreign Corrupt Practices Act (FCPA) shift toward financial services industry

Posted in SEC Enforcement

The Foreign Corrupt Practices Act (“FCPA”), enacted to deter bribery and other corrupt practices in the conduct of international business, originally claimed jurisdiction over U.S. companies and individuals who used the mail or other instrumentalities of interstate commerce to further a bribe.  A 1998 amendment, however, expanded the FCPA’s jurisdictional reach to include, among others,… Continue Reading

New SEC Chair: Mary Jo White

Posted in Disclosure Guidance

The mission of the U.S. Securities and Exchange Commission (“SEC”) is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. This sounds great, but how does the SEC actually carry out its mission? The answer lies in the SEC’s oversight and regulation function of the key participants in the securities world,… Continue Reading

Securities Law 101 (Part V): Issuing shares of stock for mergers and acquisitions

Posted in Mergers and Acquisitions

This is the fifth part of our Securities Law 101 series.  Because capital raising is such a critical function for middle market companies, we designed this series to introduce their management teams to some of the fundamental concepts in securities law.  We hope that this series will prevent some of the most common mistakes management… Continue Reading

Separating the positions of CEO and Chairman: The debate rages on

Posted in Corporate Governance

Are the CEO and the Chairman of the Board the same executive at your company?  While there can be very good reasons to have these positions held by the same person, the separation of these posts continues to be a hotly debated topic.  Since the early 1980s, much attention has been paid to corporate boards… Continue Reading

Securities Law 101 (Part III): Watch your mouth! Regulation FD’s impact on (selective) disclosure

Posted in Disclosure Guidance

This is the third part of our Securities Law 101 series.  Because capital raising is such a critical function for middle market companies, we designed this series to introduce their management teams to some of the fundamental concepts in securities law.  We hope that this series will prevent some of the most common mistakes management… Continue Reading

Has stock returned as the currency of choice in mergers and acquisitions?

Posted in Mergers and Acquisitions

Cash may be king, but the use of stock to buy a target company can be very advantageous.  The practice of using stock to purchase a target company never really went away, but it did become less desirable to target company shareholders during the recent economic downturn.  With stock values dropping and access to credit… Continue Reading

Regulation A+: Raise the capital you need without the hassle or expense

Posted in Capital Raising

Regulation A+, one of the most overlooked provisions of the JOBS Act, promises to be the best new way for private companies to raise money without the headaches of going public or the restrictions of private offerings.  As part of the JOBS Act, the SEC was tasked with creating a new offering exemption that has… Continue Reading

Securities Law 101 (Part II): Avoiding the pitfalls in a private placement

Posted in Capital Raising, Financial Institutions

This is the second part of our Securities Law 101 series.  Because capital raising is such a critical function for emerging start-up companies, we designed this series to introduce their management teams to some of the fundamental concepts in securities law.  We hope that this series will prevent some of the most common mistakes management… Continue Reading

Banks going dark under the new JOBS Act may have to wait

Posted in Financial Institutions

Just when it appeared that small banks and their holding companies could simply go private or “go dark” under the new rules in the Jumpstart Our Business Startups (JOBS) Act, legacy rules are significantly slowing the process for some.  Under the JOBS Act, banks and bank holding companies may now go dark if they have… Continue Reading

SEC grants accelerated approval of new FINRA private placement rules

Posted in Capital Raising, Financial Institutions

Bowing to industry pressure, FINRA has adopted vastly scaled back private placement requirements under FINRA Rule 5123.  Originally proposed in October 2011, the proposed rule was highly controversial because it significantly infringed on the capital raising process.  In particular, the originally proposed rules would require each offering to have an offering document, which must include… Continue Reading

The race is on: JOBS Act allows smaller banks, companies to go private

Posted in Financial Institutions

With the passing of the Jumpstart Our Business Startups (JOBS) Act, the thresholds for whether a company must be public changed dramatically. This is particularly true for smaller banks and bank holding companies.  The prior rule required registration with the SEC if the institution reached 500 or more holders of a single class of stock and… Continue Reading

New MD&A guidance for smaller financial institutions

Posted in Disclosure Guidance, Financial Institutions

The SEC Division of Corporate Finance recently issued guidance to smaller financial institutions concerning Management’s Discussion and Analysis and accounting policy disclosures. The guidance can be found in CF Disclosure Guidance: Topic No. 5, dated April 20, 2012 and amounts to rules to follow for future filings that should not be ignored. The Division focused… Continue Reading

S.E.C. Takes a Harder Line on Admissions of Guilt

Posted in SEC Enforcement

Earlier this month, the S.E.C. changed its long standing practice of allowing defendants of securities violations to “neither admit nor deny” criminal wrongdoing.  This change is effectively the S.E.C.’s response to critics that say that the agency should not let criminal defendants simply pay a fine and avoid an admission of guilty.  The new policy… Continue Reading

House Votes to Make Capital Raising Easier

Posted in Capital Raising

If the U.S. House of Representatives has its way, big changes are on the horizon for private offerings.  In an effort to enhance the ability of small businesses to raise capital, the House has now passed four bills that reduce some of the restrictions.  The bills are as follows: 1)  Entrepreneurial Access to Capital Act… Continue Reading

Want to Sign Up for Regulation by the Federal Reserve?

Posted in Financial Institutions

Considering the time and expense it takes to comply with many of the Federal Reserve rules, it seems odd that any company would volunteer to be regulated.  But some want to sign up.  In particular, some foreign companies that own a securities broker or dealer are required to register in the U.S. to do business… Continue Reading