What they are, how they work, and when they do not work. By Mark J. Astarita, Esq. 10b5-1 Plans- Insider Trading Defense As executive compensation becomes increasingly based on stock options, more and more executives find themselves in an insider trading quagmire when they attempt to sell their securities for […]
Corp Finance
Forward looking statements create potential liability
If a company chooses to make projections and issue estimates despite the uncertainty of that information, it cannot duck liability for securities fraud by reliance upon the “soft” nature of the information it disclosed. Helwig v. Vencor, Inc., No. 99-5153, en banc (6th Cir., 5/31/01). Class Actions, Effect of * […]
SEC Guidance on Mutual Fund After-Tax Return Requirements
SEC releases FAQ By John M. Baker, Esq. The SEC’s Division of Investment Management today posted its responses to Frequently Asked Questions About Mutual Fund After-Tax Return Requirements. The SEC in September extended the compliance date for advertisements involving mutual fund tax returns from October 1 to December 1, 2001, […]
SEC Allows 401(k) Plan as Qualified Investor
SEC Allows 401(k) Plan as Qualified Investor Staff changes view on status of certain plans for investment company exemption By John M. Baker, Esq. Section 3(c)(1) of the Investment Company Act of 1940 generally excludes from the definition of “investment company” any issuer whose securities are owned by not more […]
Report on Mutual Fund Fees and Expenses Released
Rise in fees noted and explained By John M. Baker, Esq. January 10, 2001 – The SEC’s Division of Investment Management today released its Report on Mutual Fund Fees and Expenses (December 2000). The report finds that fund expenses ratios rose on average during the last 20 years, although […]
NASD Proposed More IPO Purchase Restrictions
Free-riding and Withholding Interpretation being replaced? By John M. Baker, Esq. NASD Regulation posted the second amendment to its SEC rule filing on proposed Rule 2790, Restrictions on the Purchase and Sale of Initial Equity Public Offerings. Proposed Rule 2790 is intended to replace the existing Free-Riding and Withholding Interpretation, […]
SEC Sues over Internet “pre-IPO” offering
The Securities and Exchange Commission announced that on September 14, 2000, it filed a civil lawsuit against 1stBuy.com, Inc. (1stBuy) and its founder and CFO, Roger D. Pringle. The SEC’s action pertains to a pre-ipo offering, an Internet stock offering conducted by 1stBuy during 1999 and early 2000 in which […]
GAO Report on Blue Sky Revenue Released
Blue Sky Filings Become a Cash Cow By John M. Baker, Esq. Blue sky filings are quite the cash cow, according to a recent General Accounting Office report. Expenditures and Revenues of State Securities Regulatory Agencies, No. GAO/GGD-00-189R (Aug. 15, 2000). For example, in 1999 the 46 jurisdictions reporting usable […]
LAW REVIEW: BREWING TROUBLE?
INTERNET OFFERINGS CAN RESULT IN A DOUBLE WHAMMY: AN IPO BY INEXPERIENCED BROKERS IN A COMPANY WITH NO FUNDAMENTALS By now, you’re probably aware of Spring Street Brewing’s successful initial public offering completed last year. The company conducted a self-underwriting almost entirely on the Internet and then commenced trading of its securities on its Internet World […]
Lease/Back, Buy/Back Agreements
Lease/Back and Buy/Back Agreements Constitute Securities By Mark J. Astarita, Esq. The Securities and Exchange Commission (“Commission”) announced that on August 2, 2000, it filed a civil lawsuit with an application for a temporary restraining order against Phoenix Telecom, L.L.C. (“Phoenix”) and Jerold Benjamin Clawson (“Clawson”) and other emergency […]
