Technology Law Blog, IT Law & Articles | Foster Swift

The SEC Crowdfunding Proposed Regulations: Progress Updates & Post Offering Issuer Reporting Requirements

Thu, 19 Dec 2013 09:00:01 -0500

Progress Updates

During the course of a crowdfunding offering, the proposed SEC crowdfunding regulations require the issuer (the company raising capital) to provide a progress update no later than five business days after the issuer reaches one-half of its targeted offering amount, and again after the issuer reaches 100 percent of its targeted offering amount. If the issuer will accept proceeds in excess of the targeted offering amount, a third progress report will have to be filed no later than five business days after the offering deadline.

The progress update is to be provided on Form C: Progress Update (Form C-U). Click here to see a copy of proposed Form C.

The issuer will be required to file the Progress Update with the SEC on EDGAR, provide a copy to the issuer’s intermediary and investors signed up to date, and if the offering is continuing, make the Progress Update available to potential investors.

The SEC Crowdfunding Proposed Regulations: Overview of Issuer Financial & Disclosure Requirements

Mon, 16 Dec 2013 09:00:02 -0500

In a crowdfunding offering, the financial information the issuer (the company that is raising capital) is required to disclose will be determined in part by specific requirements built into the JOBS Act, and in part by SEC regulation. The proposed crowdfunding regulations include the following financial disclosure requirements:

The SEC Crowdfunding Proposed Regulations: Overview of Offering Statement & Non-Financial Disclosure Requirements

Wed, 11 Dec 2013 09:00:03 -0500

As is always the case, in the SEC's proposed crowdfunding regulations, the information an issuer (the company that is raising capital) is required to include in its offering statement is quite detailed. We present a high level overview below.

The SEC Crowdfunding Proposed Regulations: Deadline for Comments & Format for Issuer Disclosures

Wed, 04 Dec 2013 09:00:04 -0500

Deadline for Comments. The SEC's proposed crowdfunding regulations have now been published in the Federal Register. The deadline for submitting comments is February 3, 2014. As noted in our prior article, comments can be submitted electronically through the SEC's website, sec.gov, and at times, the SEC chooses to extend the comment period.

Format for Issuer Disclosures. Under the JOBS Act, the issuer (the company raising capital) must file specific disclosures with the SEC, and provide these disclosures to investors and the registered intermediary hosting the offering. The proposed regulations require the disclosures filed with the SEC to be filed through EDGAR (the SEC's Electronic Data Gathering Analysis and Retrieval System) on a new Form C.

Trade Secret Theft: Speed Date Sues Match.com for $6 million

Tue, 26 Nov 2013 09:00:05 -0500

Speed Date USA, Inc. is suing the online dating company Match.com for $5.65 million for allegedly breaching its contract and misappropriating trade secrets. In essence, the lawsuit claims that Match.com terminated the contract early and then breached its obligations to hold joint events. Match.com terminated the contract, according to the lawsuit, upon learning Speed Date's trade secrets. Match.com then allegedly began to run its own speed dating events without compensating Speed Date USA.

Trade secrets are commonly defined by state statues and generally consist of four elements for the information to constitute a trade secret. The elements of a trade secret are: (i) information; (ii) that has independent economic value; (iii) which is not generally known or readily available; and (iv) such information is subject to reasonable efforts to maintain its secrecy.

The SEC Crowdfunding Proposed Regulations: Investor Maximum Investment Amount

Fri, 22 Nov 2013 09:00:06 -0500

As a reminder, under the JOBS Act, each investor is limited as to how much the investor can invest in an issuer (the company raising capital) using the crowdfunding exemption during a 12-month period of time. There were some ambiguities in the language of the Act. The SEC proposes to clarify the ambiguities such that the limitations are as follows:

If the investor’s annual income and net worth are both less than $100,000, the investor may only invest the greater of $2,000 or 5% of the investor’s net worth during a 12-month period.
If either the investor’s annual income or the investor’s net worth exceeds $100,000, the investor may only invest the greater of 10% of the investor’s net worth or 10% of investor’s annual income, but not to exceed $100,000 during a 12-month period.

The Bitcoin: What It Is and Where It's Going

Michael C. Zarht (Summer Associate) — Fri, 01 Nov 2013 09:00:07 -0400

Bitcoin is an application of crypto-currency, which is based on the premise that money can be any object or record that is accepted as payment. Bitcoins use a peer-to-peer networking system and are not managed by any central authority. They can be transferred by a computer or a smartphone without a mediating financial institution. Bitcoins are rumored to have been originated by a computer programmer going by the name of Satoshi Nakamoto, whose real identity remains mysterious.

SEC Issues Crowdfunding Proposal

Fri, 25 Oct 2013 09:00:08 -0400

Have you heard? The Securities and Exchange Commission has voted to propose rules under the JOBS Act permitting companies to offer and sell securities through crowdfunding. Public comment on the proposed rules will be sought for a 90-day period following the publication in the Federal Register by the SEC. Crowdfunding is a new way of raising money from people online, some would even say a new social networking platform.

Is your company thinking about utilizing crowdfunding? Before you venture into this new opportunity contact your Foster Swift attorney and make sure you comply with the new rules. Contact Attorney John Mashni at 517.371.8257 or jmashni@fosterswift.com.

BYOD: Balancing Data Security with Employee Privacy

Nicholas M. Oertel — Thu, 10 Oct 2013 09:00:09 -0400

The days of carrying around a work phone and personal phone are quickly dwindling, if not already gone. Instead, businesses are implementing bring-your-own-device ("BYOD") policies that allow employees to access corporate information from their personal mobile device. On one hand, providing employees with mobile access to information increases productivity by allowing employees to work from anywhere. On the other hand, allowing corporate information to be accessed on devices that are mobile and capable of falling into the wrong hands produces a host of new security issues. This creates a difficult balancing act for employers who want their employees to be productive, but still want to maintain control over the information being accessed.

Health Care Law Blog: Mobile Medical Apps

Thu, 03 Oct 2013 09:00:10 -0400

Have you checked out our Health Care Law Blog? This week the post is titled FDA Issues Final Guidance on Mobile Medical Apps.