Securities Blog

There are two different settings in which securities transactions occur. The first, the seller of securities trying to sell to investors to try and raise capital for their company. The second setting is a buy-sale transaction that happens when investors have already purchased securities and want to trade them. Regardless of the setting in which…

What to do When You Are Flagged by the SEC and Receive an SEC Subpoena By Whitney De Agostini, Esq. April 1, 2019 You are literally minding your business when you are slapped with a subpoena or inquiry from the SEC. Why is the SEC investigating me, and what happens now? The SEC reached out…

The Securities and Exchange Commission (“SEC”) charged a public company promoter and his company with conducting a scheme to manipulate trading in at least 97 penny stocks. According to the SEC’s complaint filed November 28, 2018, Eric Landis arranged with third party advertisers forpublicly traded, small, often relatively infrequently traded, companies (“microcap” companies) to distribute…

Alexis King On February 14, 1975, Commissioner of Corporations of the State of California, Willie R. Barnes, issued a release on Repurchase Offers that commented on Section 25507 (b) of the Corporate Securities Law of 1968.(link to release)This release also discussed Rule 260.507 of the California Code of Regulations in the context of the rule’s…

Alexis King A rescission offer takes place when an issuer offers to repurchase an investor’s securities and refund his purchase price plus interest. Most states provide that an issuer can offer those who invested in transactions that violate securities laws a chance to pre-emptively buy back their securities at the original purchase price plus interest.…

Under the securities definition stock is included as a security “unless the context otherwise requires” [Securities Act §2(a)(10)]. However not all instruments that are labeled “stock” are securities. The Supreme Court ruled that the definition of a security must indicated “economic reality.” In the 1980s the courts believed that when the majority of a stock…

On December 21, the SEC instituted its first enforcement actions against robo-advisers when they issued orders against Redwood City, a California-based Wealthfront Advisers LLC and Hedgeable Inc., a New York City-based robo-adviser. Robo-advisers provide software-based, automated portfolio management services. The enforcement actions took place because the advisers published misleading advertising and made false statements about…

OPPORTUNITY FUNDS: A HUGE BENEFIT TO ALL AMERICANS There is an estimated $6.1 trillion of paper profits currently held by investors on American balance sheets. Those gains are not yet taxed, and 8,700 areas in the United States, ranging from rusty industrial towns to dusty rural hamlets, are in desperate need of revitalizing investments. The…

Drafted by Commissioner Huston Thompson of the Federal Trade Commission (FTC), this was the first securities bill presented to Congress. It proposed “merit regulation” of the securities being submitted for public purchase. “Merit Regulation” called to bring in the government to determine the reliability of the securities that were being sold. Of the many bills…

The Securities and Exchange Commission suspended trading in the securities of Nevada-basedAmerican Retail Group, Inc. (aka Simex, Inc.) after they claimed to be partnered with an SEC qualified custodian for use with cryptocurrency transactions in two August 2018 press releases. The releases reported that the cryptocurrency transactions would be “under SEC Regulations,” and that Simex,…