Compliance Bricks and Mortar for September 20


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These are some of the compliance-related stories that recently caught my attention.

An entrepreneur who, come September 23, will not be tweeting for investors by William Carleton

And not for concern that SEC proposed rules would impose pre-filing, information filing and other requirements. No, he was looking only at that “price” 506(c), the actual final rule that becomes effective next week, exacts: verification of the accredited status of all purchasers.

“From my point of view,” he told me, “the wealthier a person or family is, the less likely they’re going to give you any kind of information about their finances.”

The Red Baron and Leading in Compliance by Tom Fox

I thought about those fanciful flights of Snoopy vs. The Red Baron when I considered the compliance implications found in this past weekend’s Corner Office Section of the New York Times (NYT), where Adam Bryant interviewed Bob Moritz, chairman and senior partner of PricewaterhouseCoopers LLP (PwC), in an article entitled “Want to Learn about Diversity? Become a Foreigner”. In this article Bryant detailed several leadership lessons that Moritz had experienced over the years which I thought had quite a bit of application to the compliance practitioner.

10 Common Questions Regarding General Solicitation by Joe Wallin in the Startup Law Blog

On September 23, 2013, startups are going to be able to generally solicit their securities offerings under Rule 506(c) of Regulation D.

There are a couple of catches.

This Picture Is Worth 471 Words (More or Less) by Keith Paul Bishop in California Corporate & Securities Law

Monday is the big day for the SEC’s “Bad Actor” and “General Solicitation” rule amendments.   I’ve previously observed that many are likely to find the Bad Actor amendments to be bad rules when it comes to compliance.  Today’s blog is devoted to just one interpretational problem with the Bad Actor amendments.

Don’t get too excited about JPMorgan’s admissions to the SEC by Alison Frankel in Bloomberg

But if you look closely at what JPMorgan actually admitted, you’ll see that the SEC settlement won’t be of much use to shareholders in the class action. Don’t misunderstand me: JPMorgan is extremely unlikely to escape from the private shareholder case without paying a lot of money. That’s not because of the SEC settlement, however. As I’ll explain, the bank’s lawyers did a very good job of tailoring JPMorgan’s admissions to the SEC to minimize their impact in the class action. In fact, I suspect that future SEC defendants are going to look at the JPMorgan settlement as a model for how to quench regulators’ thirst for blood without spilling a drop in parallel shareholder litigation.

Twitter announces its IPO in a tweet by Robert C. White Jr. in Securities Edge

In its IPO filing process Twitter took advantage of one of the key available provisions of the JOBS Act. Section 6(e) of the Securities Act allows an “emerging growth company” to file an IPO registration statement on a confidential basis. This provision is designed to give the company and the SEC time to identify and work through potential problem areas or issues before investors see any information. It also allows companies to keep material nonpublic information confidential until late in the SEC review process. If the company decides not to proceed with its IPO, it has avoided the public disclosure of this information. If the company and the SEC can work out these problems and issues satisfactorily, the registration statement (amended as necessary) eventually becomes available to the public and the IPO process goes forward. This should make the registration process very quick and efficient after it emerges from the initial SEC review.