New Year’s Wishes for Smallcap World for 2013 1

For now the 6th year in a row I’m happy to throw out my wish list for the small and microcap world and those into alternatives to a traditional IPO to go public. As always I want to give special thanks to my faithful blogees especially in this, a challenging year for many of us. The ...

Double Check Those Legal Opinions

The DealFlow Report this week brings us the story of another attorney accused of issuing false legal opinions to get restrictive legends removed from stock certificates where the shares allegedly were not registered, nor was an exemption from registration available which would have permitted the removal of the legends. This particular attorney was quite experienced ...

Report from SEC Forum on Small Business – Part II

Another panel in the AM at the SEC Small Business Forum talked about the dearth of small IPOs. Numerous explanations were given for this problem. Decimalization of trading. Regulation ATS and the order handling rules in 1997. Lack of liquidity for companies below $500 million in market value. Greater attractiveness of staying private. One speaker ...

Time to Modernize Rule 419: Part IV 2

Can Rule 419 be updated so that reverse merger players will be attracted to utilize an investor-protective method? Yes I believe it can. Here is my suggested proposal: 1. Maintain the requirement to put money raised in a 419 IPO in escrow, minus underwriters compensation and 10% for expenses as currently. 2. Maintain the requirement ...

Time to Modernize Rule 419: Part III

As mentioned above, as a practical matter shells could be inherited or created without the restrictions of Rule 419. But each has its limitations. Stock in Form 10 shells cannot trade until a registration is completed post-merger. “Legacy” shells face risk of undisclosed liabilities from the past and an unknown shareholder base. Shells masking as ...

Time to Modernize Rule 419: Part II

Once Rule 419 passed, as mentioned above players tried but grew frustrated setting up shells and completing reverse mergers under the rule. So what happened? Three things. First, players discovered that a shell could be created from the carcass of a former operating public company that was sold or went out of business. Their stock ...

Tough Quarter for RM as SEC Roundtable Convenes

I am aboard Amtrak’s fabulous Acela train on the way to participate in a panel at today’s SEC Roundtable on microcap securities in DC. Follow the webcast live starting at 1pm Eastern time at www.sec.gov. I hope to talk about reverse mergers today. About our three year effort to reverse the “evergreen” requirement to remain ...

Reg A and Rule 144(i) Reform Near Top of Recommendations from SEC Forum

Two key initiatives that are close to my heart were among the top recommendations from the SEC’s 29th Annual Government-Business Forum on Small Business Capital Formation (they need to hire a good branding person to work on that name!) held last November. The full report on the event was just released. Each year the SEC ...

Chairman Schapiro: Please Don’t Decimate Small Company Finance 1

Late last month SEC Chairman Mary Schapiro announced at a Wall Street Journal forum that the Commission is looking at a variety of options to deal with concerns about reverse mergers. According to the Journal, she said the SEC is “weighing ‘a menu of ideas’ but they aren’t ‘ready for prime time, yet.’” She suggested ...

Key Recommendations from SEC Small Business Forum

Each year following the annual SEC Small Business Forum, the participants look at the recommendations that come from each breakout group and try to rank them in importance. The staff then publishes this ranking, which they have not done yet. But at my panel at the ABA conference last week, some key recommendations were listed. ...