SEC
Report from SEC Forum on Small Business – Part I
By David Feldman at 21 November, 2011, 3:16 pm
Last week, as I do most years, I went to Washington to attend the 30th SEC Government-Business Forum on Small Business Capital Formation. There are panels in the morning then breakout sessions in the afternoon where recommendations to the staff are developed. Some good things have come out of the conference each year that have [...]
Read More >>Sad Thoughts About Seasoning – Part III
By David Feldman at 21 November, 2011, 2:41 pm
Who are the losers in the new seasoning requirements? 1. As we have now learned, SPACs that trade on the OTC Bulletin Board will be subject to seasoning. We will see if the major underwriters who raise money for SPACs will seek some adjustment in the rule. 2. Most of the “two-step” deals involving a [...]
Read More >>Flash: SPACs on OTCBB Are Not Exempt from Seasoning
By David Feldman at 18 November, 2011, 5:04 pm
I need to amend my prior summary of the new requirements to “season” post-reverse merger companies on the over-the-counter markets for at least one year before uplisting to a major securities exchange. We all, SPAC-meisters included, thought the language in the proposals and final release exempted SPACs from the seasoning requirements. Since they conduct full [...]
Read More >>More Bad News Re Seasoning – It Can Be Two Years or More
By David Feldman at 16 November, 2011, 9:53 am
Before we get back to my commentary on the new seasoning requirements for major exchanges, I’ve just confirmed something that was in the “devil in the details” category. The new requirement says the seasoning period must include one full year of periodic SEC reports including an annual report on Form 10-K. The language in the release [...]
Read More >>Is the China Comeback Commencing?
By David Feldman at 13 November, 2011, 12:17 pm
Here are the latest mixed signals from the headlines: – US officials charge Longtop Financial with failing to file accurate financial reports – Lashou to complete IPO on Monday and raise $80 million – Harbin Electric goes private for $800 million – NY Court throws out securities fraud claims against China North East Petroleum – VC [...]
Read More >>Flash: SEC Approves Seasoning of Reverse Merger Companies
By David Feldman at 9 November, 2011, 11:48 pm
Yesterday, the US Securities and Exchange Commission approved rule changes requested by the three major US stock exchanges, Nasdaq, the NYSE Amex and the New York Stock Exchange. In sum, companies completing reverse mergers with SEC-reporting shell companies will now have to “season” by trading on the over-the-counter markets or another national exchange for one [...]
Read More >>Time to Modernize Rule 419: Part IV
By David Feldman at 25 October, 2011, 11:31 am
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 [...]
Read More >>Time to Modernize Rule 419: Part III
By David Feldman at 25 October, 2011, 10:51 am
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 [...]
Read More >>Time to Modernize Rule 419: Part II
By David Feldman at 25 October, 2011, 10:04 am
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 [...]
Read More >>Time to Modernize Rule 419: Part I
By David Feldman at 25 October, 2011, 9:57 am
This is the first in a multi-part posting I intend to share with you developing a case for modernizing Rule 419 under the Securities Act of 1933. First I will outline the rule briefly, then talk about what happened after the rule was passed, then discuss why modernizing the rule makes sense given both market [...]
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