SUMMARY When raising capital, companies can use Section 4(a)(2) or Regulation D exemptions to avoid costly public offerings. While Section 4(a)(2) offers privacy and no federal filings, most attorneys prefer Regulation D because it preempts state securities laws, provides clearer legal standards and offers stronger protection against lawsuits. Section 4(a)(2) remains useful mainly for single-investor … Read more
SUMMARY This primer explains cryptocurrency types: payment coins (Bitcoin), programmable platforms (Ethereum), stablecoins, privacy coins, governance tokens, utility tokens, DeFi protocols, meme coins and CBDCs. It covers their technical functions and regulatory status. The document highlights the 2025 shift from SEC Chair Gensler’s enforcement-heavy approach to Chair Atkins’ framework-focused regulation, emphasizing that legal classification depends … Read more
SUMMARY Having witnessed Enron’s collapse firsthand, the author sees striking parallels in private equity today. Continuation funds allow general partners to control both sides of transactions, collect multiple fees and exploit conflicts of interest, echoing Enron’s self-dealing. Oversight is limited, information asymmetry rampant and fiduciary standards ignored, creating a system that benefits insiders while trapping … Read more
SUMMARY Prediction market apps like Kalshi claim federal CFTC regulation as derivatives exchanges exempts them from state gambling laws, allowing nationwide operation even where betting is banned. Seven states issued cease-and-desist orders, arguing these platforms are essentially unlicensed sportsbooks evading state authority and taxes. Courts have split on preliminary injunctions. This federalism clash pits innovation … Read more
The SEC’s Division of Corporation Finance has issued a no-action letter addressing verification methods for accredited investors under Rule 506(c) of Regulation D. Key Points: The Division concurred that issuers can take reasonable steps to verify accredited investor status by requiring minimum investment amounts when combined with specific written representations from purchasers. The SEC previously … Read more
The SEC’s Division of Corporation Finance has issued a statement providing guidance on disclosure requirements for offerings and registrations of securities in the crypto asset markets. The statement offers clarity on how existing federal securities laws apply to these offerings while acknowledging the formation of the Crypto Task Force to develop a comprehensive regulatory framework. … Read more
In a previous post, I explored the pivotal role angel investors play in the startup ecosystem. These early backers provide critical funding and mentorship to fledgling companies while navigating a complex legal and regulatory environment. Venture capital, though building on similar foundations, operates on a much larger scale, with its own distinct set of legal … Read more
In today’s dynamic startup ecosystem, angel investors play a pivotal role that extends far beyond simply writing checks. These high-net-worth individuals serve as crucial catalysts in the early-stage startup landscape, operating in a complex legal and regulatory environment that merits careful consideration. At its core, angel investing involves providing capital to early-stage startups in exchange … Read more
As an entrepreneur or business owner, understanding and complying with securities laws is crucial for the success and longevity of your venture. These laws, designed to protect investors and maintain the integrity of financial markets, carry significant implications for businesses of all sizes. This post will explore the importance of compliance, what it entails and … Read more
Navigating the complexities of an Initial Public Offering (IPO) requires meticulous attention to a myriad of provisions, each carrying significant implications for the company’s future as a public entity. The negotiation of these key provisions can be a delicate balancing act, involving the interests of the company, existing shareholders, underwriters and potential investors. Let’s delve … Read more
The journey of a company from private to public ownership through an Initial Public Offering (IPO) is a transformative process that marks a significant milestone in its evolution. This transition, often viewed as a coming-of-age moment in the business world, opens doors to vast pools of capital and heightened prestige, while simultaneously ushering in new … Read more
Ivan Boesky’s story came to an end on May 20, 2024, when he passed away at the age of 87. His legacy, however, lives on in the transformed landscape of securities regulation, a constant reminder of the consequences of greed and the SEC’s commitment to maintaining fair and transparent markets. In the 1980s, the name … Read more