Securities

We represent issuers and underwriters in a broad range of public and private offerings of debt and equity securities.  Our attorneys assist clients with each step of the financing process: structuring transactions; managing and conducting due diligence; drafting and negotiating all necessary transaction documentation; and complying with applicable Federal and state securities laws, rules and regulations.  Significantly, our attorneys seek to play a strategic role in our client's financing activities, from raising "startup" and angel venture capital financing, to structuring public offerings of equity and debt. 

We represent emerging and established clients in the full range of securities matters, including:

  • private offerings of securities
  • venture capital financings
  • SEC periodic reporting and on-going disclosure for public companies
  • compliance with stock exchange rules & corporate governance standards
  • equity-based compensation plans
  • proxy contests, tender offers and battles for corporate control
  • insider trading and related concerns
  • investment company and investment advisor registration and regulation


Public Company Representation

We regularly advise public companies in complying with annual, quarterly and other periodic reporting requirements under the Federal securities laws, and counsel public companies on an ongoing basis concerning securities law compliance generally and matters involving the exchanges upon which their securities trade.  Additionally, our attorneys assist public clients in all aspects of their annual meeting preparation, including managing proxy contests, responding to shareholder proposals and complying with new requirements such as "say on pay" and "proxy access."  We also regularly prepare stock-based compensation plans and programs, and advise our clients on the tax, securities, corporate governance and investor relations aspects of implementing these plans and programs.

Disclosure Compliance

The securities markets and regulators demand thoughtful public disclosures, increasingly on a real-time basis.  As disclosure requirements under Federal securities law continue to change and expand, our attorneys provide practical and clear advice about disclosure issues based on our understanding of our clients' businesses, financial condition, regulatory environment and industry.

In particular, we work closely with our small-cap public clients in implementing a compliance regime that recognizes that they do not have access to the internal resources available to large public companies.  Many of our public company clients require our ongoing involvement in developing compliant internal controls and procedures and disclosure practices.  We also provide counsel and assistance on the increasingly complex corporate governance and stockholder relations matters that confront public issuers.

Corporate Governance

WTP has broad experience in counseling companies on a wide range of corporate governance matters.  We assist clients in understanding their legal and ethical obligations and in establishing policies and programs to fulfill those obligations.  Our governance clients range from Fortune 500 companies to privately held companies and non-profits.  We provide experienced, sound counsel to boards of directors, committees (including audit committees), and individual directors and officers and others with oversight responsibilities, whether concerning evolving best practices in corporate governance or the defense of potential claims.  We also regularly advise boards of directors of public companies in complying with SEC disclosure requirements, certifications and other compliance requirements, audit and compensation committee responsibilities and duties, day-to-day internal governance issues, insider trading compliance, shareholder relations, executive compensation issues, and director and officer indemnification and insurance coverage issues.  The breadth and depth of our practice enables our attorneys to respond quickly and authoritatively on all aspects of corporate governance.

Examples of the breadth and depth of our governance practice include the following:

  • Board and committee structure, composition and processes
  • Fiduciary duties and responsibilities
  • Annual meeting preparation and documentation
  • Responding to stockholder activism
  • Developing board committee charters and corporate governance guidelines
  • Board and committee self-evaluations
  • Board orientation and revitalization programs
  • Executive officer and director compensation
  • Indemnification, insurance and other liability protections for directors and officers
  • Internal investigations
  • Stock exchange corporate governance listing requirements
  • Change in control and defensive actions
  • Management assessments of internal controls
  • Codes of conduct, insider trading policies and other compliance policies and procedures

  • Best Law Firms

Articles

New 2018 HSR Act Thresholds Take Effect

Effective February 28, 2018, the minimum notification threshold under the HSR Act has increased from $80.8 million to $84.8 million.  Thus, an acquisition will potentially trigger an HSR Act filing only if, as a result of the acquisition, the acquirer will hold assets, voting securities or non-corporate interests of the acquired person valued in excess of $84.8 million.

FTC Announces 2017 HSR Act Thresholds

The Federal Trade Commission has revised the filing and other dollar-denominated thresholds contained in the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).  These adjustments are required to be made annually based on changes in the U.S. gross national product for the fiscal year ending September 30.  The revisions were published in the Federal Register on January 26, 2017 and take effect on February 27, 2017.  The new thresholds will remain in effect until the next annual adjustment, expected in early 2018.

FTC Increases HSR Act Thresholds: "Size of Transaction" Test Increased By 2.5% to $78.2 Million

The Federal Trade Commission has revised the filing and other dollar-denominated thresholds contained in the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).  These adjustments are made annually based on changes in the U.S. gross national product for the fiscal year ending September 30, 2015.  The revisions were published in the Federal Register on January 26, 2016 and take effect on February 25, 2016.  The new thresholds will remain in effect until the next annual adjustment, expected in early 2017.

FTC Increases HSR Act Thresholds: "Size of Transaction" Test Increased $5 Million to $75.9 Million

The Federal Trade Commission has revised the filing and other dollar-denominated thresholds contained in the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).  These adjustments are made annually based on changes in the U.S. gross national product for the fiscal year ending September 30, 2013.  The revisions were published in the Federal Register on January 23, 2014 and take effect on February 24, 2014.  The new thresholds will remain in effect until the next annual adjustment, expected in early 2015.

SEC Adopts Final Rules Permitting "General Solicitation" In Rule 506 Offerings Made Exclusively to Accredited Investors and Disqualifying Felons and Other "Bad Actors" From Rule 506 Offerings

On July 10, 2013, the Securities and Exchange Commission (SEC) issued long-awaited final rules eliminating the prohibition against general solicitation and advertising in connection with offerings under Rules 506 and 144A under the Securities Act of 1933 made solely to accredited investors.  A link to the final rules is available here.  In a separate release, the SEC adopted final rules that disqualify issuers from effecting securities offerings in reliance on Rule 506 of Regulation D in cases where the issuer or certain other persons involved in the offering have in the past been convicted of a felony or committed other “bad acts”.  The new final rules will go into effect sometime in September, 60 days after their publication in the Federal Register.  The SEC also issued separate rule proposals designed to strengthen SEC oversight of Rule 506 offerings.

SEC Raises Private Equity Fund Broker-Dealer Concerns

In remarks before the American Bar Association’s Trading and Markets Subcommittee, the chief counsel of the SEC’s Division of Trading and Markets raised concerns about certain private fund practices that implicate the need for the fund advisor or other associated persons to register as broker-dealers under the Securities and Exchange Act of 1934 (the “Exchange Act”). 

SEC Issues No-Action Relief to Accredited Crowdfunding Platforms

In late-March 2013, the staff of the SEC’s Division of Trading and Markets issued two no-action letters related to online platforms involved in private placements.  Although the facts presented by the two letters differ, both involve platforms that use a “venture fund” model to facilitate investments, and permit an investment advisor affiliated with the platform to receive incentive compensation (i.e., compensation tied to increases in the value of the investment) and reimbursement of actual expenses.  In the first letter, dated March 26, 2013, the staff indicated that they would not recommend action against the operators of the FundersClub website for failing to register as a broker-dealer under the Exchange Act.  The staff issued a similar letter to AngelList on March 28, 2013. 

Mandatory Electronic Filing of Form D Commences on March 16, 2009

Issuers offering securities in private placement transactions are required to file a Form D with the Securities and Exchange Commission (the “SEC”) and also often are required to file Form D and other materials with state securities regulators in order to secure a private offering exemption.  Traditionally, Form D filings have been paper-based.  However, pursuant to new rules adopted by the SEC in February 2008, issuers of securities will be required to file Form D in a new electronic format beginning March 16, 2009.[1]

FTC Increases HSR Act Thresholds: "Size of Transaction" Test Raised to $70.9 Million

The Federal Trade Commission has revised the filing and other dollar-denominated thresholds contained in the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).  These adjustments are made annually based on changes in the U.S. gross national product for the fiscal year ending September 30.  The revisions were published in the Federal Register on January 11, 2013 and take effect on February 11, 2013.  The new thresholds will remain in effect until the next annual adjustment, expected in early 2014.

New Private Placement Filing Requirement for Broker-Dealers - FINRA Rule 5123

December 3, 2012 is the effective date for new FINRA Rule 5123 (Private Placements of Securities). After that date, FINRA members that sell certain securities in private placement transactions under either Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D to individual, non-institutional investors who do not meet limited exemption criteria will be required to file any private placement memorandum, term sheet or "other offering document" used by the firm, or file a notice stating no offering document was used.

JOBS Act Title II Update

On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the “JOBS Act” or the “Act”) into law.  Title II of the Act requires that the SEC revise its rules to permit general solicitation and general advertising in offerings relying on SEC Rule 506, provided that all purchasers of the securities are accredited investors.  These revisions will eliminate two longstanding pillars of private placements—the non-public manner of offering and—the prohibition on general solicitation, which requires the issuer and/or its intermediaries to have a pre-existing relationship with investors.  These private offering requirements have established the traditional divide between registered public offerings, such as IPOs, and exempted private placements for over 60 years. 

SEC Issues Warning on Crowdfunding

As discussed in our Client Alert distributed last week1, on April 5, 2012 President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act” or the “Act”).  Some parts of the Act, such as the new category of “emerging growth companies” and the new thresholds for registration and deregistration under Sections 12(g) and 15(e) of the Securities Exchange Act, became effective immediately, while others, such as the “crowdfunding” exemption, require SEC rulemaking before becoming effective.

SEC Adopts Final Net Worth Standard For Accredited Investors

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”)1 changed the investor net worth standard that applies to natural persons (individually or jointly with their spouse) to exclude the value of the primary residence for purposes of determining whether the persons qualify as an “accredited investor” on the basis of having a net worth in excess of $1.0 million.  This change to the net worth standard became effective on July 21, 2010.  Dodd-Frank also required the SEC to revise its rules under the Securities Act of 1933 (the “Securities Act”) to conform to the new standard.2 The SEC has now amended its rules to conform them to Dodd-Frank and to clarify the treatment of debt secured by a person’s primary residence for purposes of the net worth calculation.3 The amended net worth standard will be effective February 27, 2012 and as discussed in greater detail below issuers will likely need to revise investor questionnaires for any Regulation D offers or sales on and after that date (including sales to existing investors).

Dodd-Frank Reform Act Triggers Immediate Change in Regulation D "Accredited Investor" Definition

In response to the significant financial difficulties experienced over the past three years, on July 21, 2010 President Obama signed into law sweeping financial services reform legislation entitled the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act").1 Running over 2,000 pages, the Act is designed to effect a broad range of reforms to the U.S. financial regulatory system. Although many provisions of the Act are not scheduled to take effect until one year after enactment or until regulatory bodies first adopt rules and regulations to implement the Act's requirements, one provision of the Act is effective immediately: a provision that excludes the value of a natural person's primary residence when determining if he or she meets the $1 million net worth test in order to qualify as an "accredited investor" under Regulation D, the securities law provision governing private placements. As a practical consequence, subscription documents and investment representations and procedures for ongoing and future private offerings should be revised immediately.

SEC Provides Shareholder Proposal Guidance - Staff Legal Bulletin 14D

On November 7, 2008, the Securities and Exchange Commission's Division of Corporation Finance issued Staff Legal Bulletin No. 14D providing information regarding Rule 14a-8 of the Securities Exchange Act of 1934. The bulletin is the fourth of a series of bulletins[1] addressing various aspects of Rule 14a-8, and provides guidance on substantive proposals, as well as on procedural matters relating to the processing and submission of no-action letter requests.

SEC Further Extends Section 404 Compliance Date for Smaller Issuers and Proposes Changes to Accelerated Filer Rules

At an open meeting held on September 21, 2005, the SEC extended for an additional year the date by which companies that are not “accelerated filers” (generally, reporting issuers that have less than $75 million in public equity float) must comply with the Sarbanes-Oxley Act Section 404 requirement that a reporting issuer include in its annual report both a report of management and an accompanying auditor’s report on the issuer’s internal control over financial reporting. This extension also applies to the auditors’ attestation report on management’s assessment of the company’s internal control over financial reporting.

Mandated Electronic Filing and Website Posting of Section 16(a) Reports

On May 7, 2003, the Securities and Exchange Commission ("SEC") issued final rules to mandate electronic filing and website posting of beneficial ownership reports under Section 16(a) of the Securities and Exchange Act required to be filed by officers, directors and 10% beneficial owners of registered public companies. The final rules complete the SEC's implementation of the requirements of Section 403 of the Sarbanes-Oxley Act. SEC Release No. 33-3230 is available at http://www.sec.gov/rules/final/33-8230.htm.

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