Securities lawyer Chris Barsness talks about the recent collapse of FTX and its exchange and the chapter 11 bankruptcy filing by FTX Trading and issues around regulations.
Category Archives: Business Transactions Blog
-
506(b) versus 506(c)
506(b) versus 506(c) Section 5 of the Securities Act of 1933 requires all issuers to register securities with the Securities and Exchange Commission (“SEC”) unless an exemption applies. Almost every instrument utilized to raise capital is captured by this registration requirement. Regulation D serves as an important vehicle for certain companies to raise capital with…
-
Kim Kardashian Settles With Sec For $1.26 Million For Violations Of The Anti-Touting Provision
On October 3, 2022, the Securities and Exchange Commission announced charges against Kim Kardashian for promoting a crypto asset security called EMAX, offered and sold by EthereumMax, on social media without disclosing the payment she received in exchange for the promotion. Kardashian agreed to settle the charges, paying $1.26 million in penalties, disgorgement, and interest,…
-
Exits – IPO, M&A, Reverse Merger
Many people start companies because they are passionate about their idea, product, or vision. Investors love to see that passion in a founder, but they are obviously wanting a return on their investment. This is where exit strategies come into play, sometimes referred to as a liquidity event. You could lump things like a dividend…
-
Valuation
Common models used to value a company, how these apply to startups, stock valuation, stock option valuation, and comparisons with US GAAP accounting valuation. Common Company Valuation Methods Market Capitalization Most people are familiar with terms like “market cap” if they have any interest in publicly traded stocks. Market capitalization is a method that can…
-
Private Placement Memorandum
So what exactly is a private placement memorandum (PPM) and why do I need one? What is a PPM? A private placement memorandum is an offering document, sometimes called a prospectus, offering circular, or PPM. The majority of early startups and emerging growth companies commonly raise money through what are known as private placements. It…
-
The Due-On-Sale Clause: What It Is And When To Ignore It
A Due-On-Sale Clause can be found in most contemporary mortgage instruments and, as the name suggests, states that the mortgage debt will become due upon sale of the property. From a lender’s perspective the logic is fairly straightforward – security for the loan is put at risk when the collateral property is owned by a…