Articles Tagged with Securities and Exchange Commission

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AdobeStock_243450386-300x214After the Securities and Exchange Commission (SEC) amended its “accredited investor” definition in August 2020, it amended its rules once again in November of the same year. In its latest rule amendments, the SEC increased the annual caps on equity crowdfunding and raised the maximum offering amounts for Reg A+ offerings and Rule 504 of Reg D offerings.

In November 2020, the SEC amended its rules to expand investment opportunities and promote capital formation while also strengthening protections for investors in the United States. Some of the most significant rule amendments included:

  • Amend the rules governing the integration of private and public offerings to permit concurrent private and public offerings;
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Mergers in the tech world are quite common. In a merger, one or more companies combine to form a new company (i.e., legal entity). Mergers can be complex and have many moving parts. The transaction can often include legal documents, valuation, key deliverables, operational logistics, regulatory matters, and financing and payments. A Silicon Valley M&A attorney can assist with your merger M&A transaction and handle multiple facets of the transaction.

Structuring the M&A Transaction

A merger and/or acquisition is a term that can be used to represent several types of transactions. Some M&A transactions might include:

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Securities law is something you might hear in the news because of some violation or in relation to white-collar crime. With the wild ride that the stock market, including the gradual introduction of permissible, legal trading of cryptocurrencies (like bitcoin) and tokens from initial coin offerings (“ICO’s”), has securities laws a popular, researched and well-debated topic among entrepreneurs, businesses, investors, lawyers, and regulators. But, what are these laws? Securities laws are detailed and complex laws that govern securities. Below, we discuss some of the basic concepts of securities laws. For more information, contact a Mountain View transctional attorney today.

Understanding Securities

A security is a common word used in investment circles. It is a broad term that refers to the instrument used in certain transactions, financing or investments that are sold in various financial markets. The Supreme Court uses the Howey Test to determine whether a transaction represents and investment contract (and thus a security) by using the following definition of when an investment contract is a security: “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.” Examples of securities include:

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Hedge funds are defined as a limited partnership of investors that use high risk methods to realize large capital gains. Without an applicable exemption, the hedge fund must register with the Securities and Exchange Commission and meet complex, ongoing filing and disclosure requirements. However, depending on investor qualifications, the hedge fund can avoid being defined as an investment company if its participants are either accredited investors or qualified purchasers. Thus. hedge fund managers should consult with an experienced California corporate attorney in order to ensure that their hedge fund practices are in compliance with existing law and regulatory mandates.

The Difference Between an Accredited Investor and a Qualified Purchaser

An accredited investor is an individual who satisfies SEC requirements for income, net worth, asset size, government status, and/or professional experience. In other words, an accredited investor is financially savvy, and because of this , he or she has less need for the protections offered by mandatory regulatory disclosures. Thus, an investment advisor or group working with an accredited investor can be exempt from certain mandatory disclosures. A qualified purchaser is similar to an accredited investor, but requires a higher net worth requirement as defined by the United States Code.

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