In response to the ill effects the coronavirus pandemic is having on business, the Securities and Exchange Commission on May 4, 2020 adopted a temporary final rule to make it easier for existing businesses to raise up to $250,000 through Regulation Crowdfunding.
Under the relaxed rules, which are in effect only until August 31, 2020, a business is excused from complying with the Regulation Crowdfunding requirement to have its financial statements reviewed by an independent public accountant. During this limited period, the SEC is requiring only certain information from the business’ Federal income tax returns certified by the principal executive officer. That represents a significant time and financial savings for companies – especially small businesses – that need a quick infusion of capital during rough times caused by the COVID-19 virus. Continue reading “SEC Offers an Elixir for Small Businesses Feeling the Financial Effects of COVID-19”
This week, in a nearly 300-page release, the Securities and Exchange Commission proposed significant changes to its rules applicable to online equity crowdfunding and other securities offerings that are exempt from SEC registration.
These kinds of offerings generally are most advantageous to smaller and emerging companies that have limited funds to spend on raising capital. Last year, exempt securities offerings accounted for an estimated $2.7 trillion (69.2%) of new capital, compared to $1.2 trillion (30.8%) raised through SEC-registered offerings.
In an unusual and courageous move last week, SEC Commissioner Hester Peirce (aka “Crypto Mom”) urged the Securities and Exchange Commission to adopt a rule that would exempt the sale of tokens or cryptocurrencies from most provisions of the federal securities laws. It’s courageous in its scope and unusual because she (and her staff) drafted the proposed rule leaving the SEC few excuses to avoid considering it.
If adopted by the SEC, the rule will allow anyone to conduct initial coin offerings (ICOs) of tokens intended to be used to develop a decentralized or functional network, provided, that “Network Maturity” occurs within three-years. “Network Maturity” is defined by the proposed rule as when the network is either (i) no longer controlled by a single group or (ii) is functional, as demonstrated by the ability of token holders to use tokens for the transmission and storage of value, to prove control over the tokens, to participate in an application running on the network or in a manner consistent with the utility of the network. Continue reading “SEC Commissioner Hester Peirce’s Provocative Crypto Proposal”
In late May, President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act. Although the president and many Republican members of Congress had threatened to repeal and replace Dodd-Frank, the new law’s actual changes are relatively minor. The new law rolls back some of the post-financial crisis legislation enacted in 2010, particularly for smaller community banks and credit unions. But it largely leaves intact the core framework of Dodd-Frank.
It is tax season, which means that criminals are busy trying to steal people’s tax information (e.g., names, addresses, social security numbers, income information), which they can use to file fraudulent tax returns and steal tax refunds.
As an employer, you likely maintain your employees’ tax information and, thus, are a target. Indeed, criminals regularly target employers and hack their databases or pose as company executives and send a phishing email asking for all employees’ W-2s for accounting purposes.
As such, it is important to understand your duty to protect your employees’ personal information, as well as potential liability for failing to do so. Most states, including California, make clear that employers have a legal duty to protect their employees’ personal information. These courts also make clear that whether an employer has legally compliant, written policies for protecting private information and responding to data breaches will heavily inform whether and the extent of an employer’s liability for a data breach.
Startups are increasingly vulnerable to demand letters and lawsuits from “patent trolls” looking for opportunities to extract quick settlements from small companies with limited resources to defend against claims of patent infringement. To protect your business, developing a thoughtful approach for responding to such non-practicing entities is essential. Here are 5 tips for moving forward:
1. Don’t Panic. When confronted with a patent demand letter or infringement lawsuit from a non-practicing entity, it is perfectly understandable to be upset. You have likely invested substantial sums of money into your business and/or product, and now feel that the investment is under attack. Maintaining your calm, however, will better enable you to think clearly and strategically about next steps. Continue reading “Moving Startups Forward: Tips for Responding To A Patent Troll”
Here are 10 ways to build a rock-solid foundation for your new company and avoid constructing a masterpiece on top of quicksand:
Make sure your company’s name isn’t already taken. As a starting point, search the name on Google and other Internet search engines. Then search the U.S. Patent and Trademark Office website (uspto.gov). Important: repeat this process each time you pick the name of a new product or service.