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The SEC Continues to Pursue Enforcement Actions Against Companies For Whistleblower Violations

Protecting and encouraging whistleblowers has been a priority for the U.S. Securities and Exchange Commission (“SEC”) and its enforcement division. The SEC recently announced enforcement actions against two companies for their use of restrictive language in severance agreements that required departing employees to waive their rights to any monetary recovery under Rule 21F-17 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The rule, promulgated under the Dodd-Frank Act, is part of the SEC’s whistleblower program and is intended to prohibit employers from interfering with an employee’s right to report potential securities law violations to the SEC.

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TAGS: SEC, SEC Enforcement, Securities Law, Securities Regulation, Whistleblower

Regulation Crowdfunding

A new tool to raise capital is now available for small business and startup owners who may have previously believed that raising funds through selling an interest in their business to be too cumbersome or expensive.   

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TAGS: Corporate Law, Securities Law, Securities Regulation

Update on the Dodd-Frank and JOBS Acts: Recent Enactments & Outstanding Actions

While several years have passed since the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Start-Ups Act took effect, several high-profile provisions of each act have not yet been implemented as final rules await adoption by the Securities and Exchange Commission. This advisory reviews certain provisions of each act and summarizes other related securities regulation developments.

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SEC Proposes Amendments to Exchange Act Registration Thresholds

As mandated by 2012’s Jumpstart Our Business Startups Act (“JOBS Act”), the Securities and Exchange Commission has proposed amendments to the thresholds at which a company will be required to register its equity securities under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) and thus be subject to the Exchange Act’s periodic reporting obligations. Exchange Act registration would now be required only when a company has more than $10 million in assets and a class of equity securities “held of record” by either: (a) 2,000 persons (up from 500 persons), or (b) 500 persons or more who are not “accredited investors” under SEC rules (with the determination being made as of the last day of the fiscal year). The proposal would also amend the threshold requirements for banks or bank holding companies to terminate or suspend the registration of a class of securities under the Exchange Act from 300 to 1,200 persons. 

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TAGS: JOBS Act, SEC, Securities Law, Securities Regulation

Amendments to the Ohio Control Share Acquisition Act

Effective July 9, 2014, recent amendments to the Ohio Control Share Acquisition Act will require an Ohio public corporation wishing to opt out of the Act’s provisions by amending its articles of incorporation or code of regulations to first obtain approval of its board of directors and a majority shareholder vote. Other changes include a three-year “look back” provision for purposes of determining whether a shareholder is an “interested shareholder,” and additional exemptions for certain transactions under the Act which give more discretion to the board of directors.  Please click here to view our client advisory.

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TAGS: Corporate Law, Securities Law, Securities Regulation

U.S. Court of Appeals Strikes Down Part of SEC’s ‘Conflict Minerals’ Disclosure Rules

On April 14, 2014 the U.S. Court of Appeals for the D.C. Circuit struck down part of the U.S. Securities and Exchange Commission’s (“SEC”) controversial new “Conflict Minerals Rules” requiring publicly-traded companies to disclose whether their products contain certain minerals from certain central African countries. Despite this decision, until further notice public companies should continue to carry out efforts to comply with the SEC’s rules. 

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SEC Votes to Propose Regulations for Crowdfunding

On Wednesday October 23, 2013, the Securities and Exchange Commission (SEC) voted unanimously to propose regulations for equity crowdfunding, which will enable unaccredited U.S. investors to invest in startups and small businesses. 

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TAGS: Crowdfunding, JOBS Act, SEC, Securities Law, Securities Regulation

SEC Eliminates Prohibition on General Solicitation and General Advertising in Private Offerings

At an open meeting on July 10, 2013 the SEC approved changes to certain rules regulating private offerings of securities that permit issuers to use general solicitation and general advertising. Specifically, under the new rules for Rule 506 of Regulation D, the most widely-used exemption from registration, issuers may use general solicitation and general advertising to offer their securities provided that: 

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TAGS: Corporate Law, Securities Regulation

2013 Securities Regulation Updates

With the 2013 annual meeting season well underway, we want to remind you of compliance deadlines, new and proposed listing rules, developments in recommendations of proxy advisory firms and other securities regulation and corporate governance matters.

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TAGS: Corporate Governance, Corporate Law, Securities Law, Securities Regulation

SEC Sides with Netflix – Social Media Channels Comply with Regulation FD

So apparently, Netflix is good for something other than just House of Cards.  In an eagerly-awaiting ruling Wednesday, the SEC issued a report confirming that companies are permitted to disseminate material information through their social media channels in compliance with Regulation Fair Disclosure (“Regulation FD”) so long as investors know that companies are going to do so. 

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TAGS: Regulation Fair Disclosure, Securities Law, Securities Regulation, Social Media

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