Search results for: securities act

If you are looking for the complete text of new Section 4(a)(7) of the Securities Act of 1933, as amended, I have quoted it in full below. You can also find the entire text of the Fixing America’s Surface Transportation Act or the “FAST Act” at this link. This new law makes it substantially easierContinue reading “The Text of New Section 4(a)(7)”

You may not be aware, but the federal securities laws contain two definitions of the term accredited investor. One definition is helpful to startups, and the other is not. The definition of accredited investor that is helpful to startups is found in Regulation D. Rule 506 of Regulation D is the securities law exemption usedContinue reading “The Two Definitions of Accredited Investor”

The SEC has proposed amendments to Rule 147. The trouble is, the proposed rules would take away one of the federal law support beams for Washington State’s equity crowdfunding law. Our statute requires compliance with Section 3(a)(11) of the Securities Act of 1933, as amended, and Rule 147, and the SEC has proposed that Rule 147 no longerContinue reading “Washington State Crowdfunding Law in Jeopardy?”

The RAISE Act would allow holders of stock in private companies to more easily sell their shares. Sales of private company stock are known as “secondary transactions.” Secondary transactions are currently hard to do because of the securities law restrictions on sales of shares in private companies, and also because companies frequently impose a number ofContinue reading “The RAISE Act: Good News for Tech Workers”

Congress is preparing a bill known as the Financial CHOICE Act of 2016. There is a lot in the bill (and so it is worth scanning the table of contents for issues you might care about). One of the provisions of the bill, Section 1066, would revise the Form D filing requirements to make them easier onContinue reading “The Financial Choice Act: How to Make it Better re Form D”

Section 201(a) of the JOBS Act repealed the ban on generally soliciting or generally advertising private securities offerings, provided certain conditions were met. Many people believed that this change in the law would be one of the most dramatic brought about by the JOBS Act. But things didn’t go as planned. Today, only a smallContinue reading “506(c) Offerings: Let’s Fix the Verification Rules”

I overreacted a bit in my last blog post when I said that Washington State’s crowdfunding law might be statutorily “broken” if the SEC’s proposed rules on Rule 147 were adopted. If you are not familiar with how the securities laws in this area are written, Rule 147 is the rule that interprets Section 3(a)(11) of the Securities Act.Continue reading “State Crowdfunding: The SEC’s Proposed Rules”

Indexing the Accredited Investor Standard to Inflation: A Bad Idea Now that the election is over, it is unclear, at least to me, which direction startup public policy will take. It is in all of our best interests that we have a startup public policy that promotes innovation and creativity. Too often we have lawsContinue reading “Indexing the Accredited Investor Standard to Inflation: A Bad Idea”

Broad-based employee stock ownership is one way to ensure that the wealth created in startups is widely shared by those who helped create the wealth. But broad-based stock ownership in private companies is thwarted by our tax code. Our tax code discourages the sharing of stock ownership among a company’s workers by taxing workers onContinue reading “Employee Stock Ownership: Empowering It Through A New Law”

Is a Demo Day a general solicitation of securities putting your company in Rule 506(c) as opposed to 506(b)? The SEC has issued new guidance on this question. Per the SEC’s new guidance, a Demo Day is not necessarily a general solicitation. However, it depends on what you do at the Demo Day. If youContinue reading “Is a Demo Day General Solicitation?”