Emerging Issues on SEC New Rule 506(c)
Overview:Pursuant to the New Rule 506(c), the Securities and Exchange Commission (SEC) issued final rules regarding accelerated capital formation for emerging businesses, which went into effect on September 23, 2013. The SEC is also considering new and extensive due diligence requirements, which may include: (1) making a filing of your intent to use general solicitations before the first general solicitation occurs; (2) making a closing filing after the termination of the offering, submitting general solicitation materials to the SEC prior to using such materials and (3) including certain legends and other specific disclosures on all general solicitation materials. Finally, it is important to note that this ruling applies to all entities, such as corporations, limited liability companies and partnerships that may potentially have capital formation expansion.
The Knowledge Group has assembled a panel of speakers to provide an in-depth analysis of the emerging issues in SEC New Rule 506 that companies face in this year 2013 and beyond. In a two-hour live webcast, speakers will discuss:
• Making Sure Your Company Does Not Have Any "Bad Actors"
• Determining the Amount of Funds You Can Raise
• Finding Potential Investors
• Determining Which Investors May Purchase Stock or Securities
• Preparing the Transaction Documents
• Completing the Sales of the Stock or Other Securities
• Governmental Filings and Compliance
• Best Practices
• Latest Regulatory Updates
Patrick D. Sweeney, Partner
Herrick, Feinstein LLP
- Use of general solicitation and advertising activities under Section 506(c) will be tempered by regulatory and liability considerations.
- Section 506(c) will impose challenging diligence standards with regard to verification of accredited investors.
- Private funds will face special regulatory issues.
Julia D. Corelli, Partner
Pepper Hamilton LLP
- what things are considered solicitation
- switching from a 506(b) to a 506(c)
- potential gotcha’s in using 506(c)
- industry take up of the new process
William G. Strench, Member
Frost Brown Todd LLC
- Requirements for determining Accredited Investor status
- Proposed filing requirements for 506(c) transactions
Gregory S. Fryer, Partner
Verrill Dana LLP
- The ability to engage in “general solicitation” provides new flexibility, but at the cost of increased risk of losing the safe harbor exemption; involvement of expert counsel is highly recommended:
- Care should be taken to define covered persons who should receive “bad actor” questionnaires – the issuer is held to a standard of a reasonable investigation here
- Accredited investor verification standards under Rule 506(c) remain uncertain for individual investors
- Expect to see a proliferation of third-party vendors who offer to certify individual income or net worth standards
- Rule 506(c) may help encourage registered broker-dealers to move back into the private placement market – a good thing
Who Should Attend:
- Attorneys and Consultants for Public Companies
- CFOs & Finance Teams
- Fund Managers & Related
- Bank Executives
- Compliance, Risk and IT Officers
- Legal Risk Officers and Administrators
- Managers who oversee employees utilizing social media
- Other Related/Interested Professionals
Patrick D. Sweeney is chair of Herrick's Investment Management Practice Group. He represents investment managers, investment funds and investment fund fiduciaries in a wide range of corporate, regulatory and transactional matters. Pat also represents major institutional investors in corporate debt restructuring and non-U.S. investors in inbound investments.
Prior to joining Herrick, Pat practiced investment management law in-house for more than 10 years, first as senior investment counsel for Merrill Lynch Asset Management and then as General Counsel to Nomura Corporate Research and Asset Management.
Pat is an active member of the New York City Bar Investment Management Committee and the Investment Company and Investment Adviser Subcommittee of the American Bar Association's Business Law Section, and has participated for many years in committees, conferences and panel presentations of the Investment Company Institute, the Loan Syndications and Trading Association, the Mutual Fund Directors Forum and many other investment management industry organizations.
Patrick D. Sweeney is chair of Herrick's Investment Management Practice Group. He represents investment managers, investment funds and investment fund …
Julia D. Corelli is a partner in Pepper Hamilton LLP’s Corporate and Securities Practice Group and co-chairs its Funds Services Group, a core constituent of Pepper’s Investment Funds Industry Group. She concentrates in private investment fund formation, operations and compliance, private equity investment transactions, venture capital investments, acquisitions and dispositions of business enterprises, joint ventures, and corporate/shareholder and partner/partner dealings. She is also experienced in matters of investment fund principal compensation and succession planning. She currently serves the firm as vice chair of its Executive Committee and co-chair of its Commercial Department.
Julia D. Corelli is a partner in Pepper Hamilton LLP’s Corporate and Securities Practice Group and co-chairs its Funds Services …
Bill’s practice focuses on securities and corporate law with an emphasis on venture capital and private equity financing, public offerings and mergers and acquisitions. In this capacity, he has represented numerous businesses, from start-ups to public companies, including forming over 10 private equity and venture capital funds.
Bill is a member of the Board of Directors of Commonwealth Seed Capital, LLC. He served on the KBA Committee which drafted the Kentucky Limited Liability Company Act and registered limited liability partnership legislation. Bill was an Adjunct Professor of Law at the University of Louisville Law School in 1995 (Corporate Finance) and in 1999 (Venture Capital) and received the Gordon Davidson Teaching Award from the University of Louisville. Bill is the Chairman of the Frost Brown Todd emerging businesses and venture capital group.
Bill’s practice focuses on securities and corporate law with an emphasis on venture capital and private equity financing, public offerings …
After practicing in New York City and Atlanta, Greg moved to Maine to head up Verrill Dana’s securities law practice. With more than 30 years’ experience practicing securities and corporate law, he has recently paid specific attention to the JOBS Act and has counseled companies, broker-dealers and angel investors on the implications of various aspects of that important Act. Greg also frequently assists other lawyers on the more technical aspects of projects involving financial regulations, legal opinions or contract drafting. Greg has been recognized by Best Lawyers®, Chambers, and SuperLawyers for expertise in M&A and securities law. He earned his law degree from Cornell Law School, and his undergraduate degree from Dartmouth College.
After practicing in New York City and Atlanta, Greg moved to Maine to head up Verrill Dana’s securities law practice. …
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Method of Presentation:
NASBA Field of Study:
Accounting - 1.00 credit hour and Finance - 1.00 credit hour
NY Category of CLE credit:
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About Herrick, Feinstein LLP
Founded in 1928, Herrick, Feinstein LLP is a prominent 160-lawyer firm providing a full range of legal services, including real estate, art law, bankruptcy and business reorganization, commercial litigation, corporate law, employment law, government relations, insurance, intellectual property, sports law, and tax and personal planning. Headquartered in New York City, Herrick also has offices in Newark, Princeton, Washington, D.C. and Istanbul, Turkey. The firm’s skilled team of legal professionals is committed to providing innovative legal solutions and superior client service. Herrick is committed to your success. For more information, visit https://www.herrick.com/
About Pepper Hamilton LLP
Pepper Hamilton LLP is a multi-practice law firm with more than 500 lawyers nationally. The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world. Pepper’s Funds Services Group is composed of more than 50 lawyers from multiple and diverse practice areas. With judgment honed from representing hundreds of pooled investment vehicles over more than two decades, we have helped both U.S. and international funds and their sponsors, managers, advisers and investors define and achieve their goals.
The Funds Services Group is a core component of the firm’s Investment Funds Industry Group, which is an interdisciplinary industry group comprised of more than 60 lawyers nationwide who focus their practices in areas vital to the success of all types of investment funds throughout their entire life cycle, including with respect to formation, transactional and investment, operational, and regulatory and compliance matters.
About Frost Brown Todd LLC
Frost Brown Todd is a full-service law firm serving some of America’s top corporations and emerging companies. With attorneys regularly identified by clients, peers and industry organizations as leaders in their practice areas, the firm advises and protects clients in business transactions and litigation in industries including insurance, banking, financial services, manufacturing, transportation, real estate, construction, energy and healthcare. Its over 475 attorneys in nine offices throughout Indiana, Ohio, Kentucky, Tennessee and West Virginia provide unparalleled service to meet clients’ needs; deliver the insights and solutions available only from a diverse group of professionals; and support the communities in which they operate. To learn more, visit www.frostbrowntodd.com.
About Verrill Dana LLP
Verrill Dana is a full service law firm with more than 100 attorneys and a growing number of service-based practice groups. The firm has a regional presence in the Northeast, with offices from Maine to Washington, D.C., allowing it to serve clients with interests across the country and around the world. Through scalable staffing, careful communication and skillful project management, Verrill Dana helps individuals and businesses achieve their goals in a manner that suits their unique legal needs and preferred work methods.