Originally created by Congress in 1990, the EB-5 program was intended to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by the United States Citizenship and Immigration Services, based on proposals for promoting economic growth. Unscrupulous parties have on occasion taken advantage of interested parties and perpetrated schemes in this area on people who are understandably keen to take part in this otherwise very beneficial program.

Our colleagues at the EB-5 Matters blog have written an interesting post on one such case in Florida. Check it out here.


On October 13 from 1 – 2:30 pm ET, join Pam Greene and a panel of other experts for a timely webinar covering Regulation A+: Practical Tips and Guidance for Launching a Mini-IPO. Regulation A+ went into effect in June 2015 to allow private US and Canadian based companies to raise equity – up to $20 million under Tier I and up to $50 million under Tier II – from both accredited and nonaccredited investors, subject to certain limitations.

During this webinar, our distinguished panel, including Pam Greene, member in the Corporate and Securities Practice at Mintz Levin;   TJ Berdzik, CFA, of StockCross Financial Services, Inc.; Maggie Chou, of OTC Markets; Yoel Goldfeder, of Vstock Transfer; and Rudy Singh, of S2 Filings, will discuss the legal and business considerations in launching a Tier II Regulation A+ offering, how investors can achieve liquidity through the OTC Market, and why many are calling Tier II offerings a “Mini-IPO”.

We hope you can take part in what is sure to be an informative discussion. Click here to register.

Investors that own more than 5% of a public company’s securities and file under the exempt category (which includes most venture capital firms and other similar investors) are required to file their beneficial ownership reports within 45 days after the close of the calendar year (i.e., on February 14). Investors have a few extra days to file this year, as Valentine’s Day falls on a Saturday, followed by a Monday holiday. Therefore Schedule 13Gs will be due on Tuesday, February 17, 2015.

Don’t Forget Those Filings for Newly Public Companies

Investors in companies that went public in 2014 who either acquired all of their securities prior to the IPO or, if they acquired shares after the IPO, all post-IPO acquisitions plus all other acquisitions of stock during the preceding 12 months did not exceed 2% of the company’s outstanding common stock, are deemed to be exempt investors and are required to file an initial Schedule 13G by February 17, 2015 to report their holdings as of December 31, 2014.

Need a primer on this reporting obligation? To learn more about the rules and the timing of filing Schedule 13Ds and Schedule 13Gs in other circumstances, click here for a detailed memorandum.

An increasingly popular hedge fund strategy, commonly referred to as “appraisal arbitrage,” recently received a significant boost from the Delaware Court of Chancery. Appraisal arbitrage refers to the practice of buying shares in a target corporation following announcement of a buyout transaction, and seeking value above the buyout price through the appraisal process. In In Re Appraisal of Ancestry.com, Inc. (January 5, 2015), the Court found that a beneficial owner had standing to seek appraisal in respect of an acquisition even though it had purchased its shares in the open market after the record date for the stockholder vote and was unable to show that its shares were not voted in favor of the transaction. In denying Ancestry’s motion for summary judgment, the Court reasoned that the record holder of the shares (here Cede & Co.) only needed to show that enough shares were not voted in favor of the acquisition to cover the number of shares for which it demanded appraisal. Once this hurdle is met, a beneficial owner of such shares (here Merion) does not need to show that its specific shares were among those not voted in favor of the acquisition in order to file the appraisal petition. Thus Merion had standing to pursue appraisal. As money continues to flow toward this strategy, it may result in more appraisal petitions and increased closing risk, as well as erosion of shareholder value in public M&A.

We are pleased to announce that we are joining forces with our colleagues in Mintz Levin’s Securities & Capital Markets Practice to provide more comprehensive coverage of all aspects of the federal and state securities laws and regulation, Delaware corporate law, and related topics. While continuing to blog about developments in securities and shareholder litigation and SEC enforcement, we will be adding more posts discussing public company reporting, disclosure, and compliance; capital market trends and best practices; and corporate governance matters, among other topics. To lead this expansion, veteran securities lawyers Megan Gates and Brian Keane are joining us as co-editors.

Reflecting these changes, we will also be changing the name of this blog from “Securities Litigation and Compliance Matters” to “Securities Matters.”  Visitors to the old site, www.securitieslitigationmatters.com, will be automatically redirected to the new site, www.securitiesmatters.com. If you are a subscriber to www.securitieslitigationmatters.com, your subscription will automatically transfer over to www.securitiesmatters.com, so you do not need to make any changes.

Though our new name is shorter, our coverage will be broader. Our goal is to become a convenient, one-stop source of timely analysis and advice concerning new developments in securities and corporate law for public and private companies, directors and officers, and financial service providers.


By rule, the SEC is required to issue a report on the Commission’s administrative proceedings caseload every six months.  On October 29, 2014, the SEC issued its most recent report covering the six month period from April 1, 2014 through September 30, 2014.  This report also included the statistics from the two prior six-month periods for comparison purposes.

Here are three of the more notable statistics from the report:

1)  Newly filed proceedings initiated before the SEC’s Administrative Law Judges increased by 44% over the prior six month period.  Although, the total  number of new matters was roughly on par with those filed in the same six-month period from 2013 (139 for 2014 and 121 for 2013).

2)  The median age of the proceedings at the time when the Adminstrative Law Judge issues an initial decision decreased from 52 days in the prior six month period to 40 days in the most recent six month period.  This represents a marked improvement on the 186.5 day median for the same six-month period in 2013.

3)  While the Administrative Law Judges have improved on the time it take to issue an initial decision, the time it takes the Commission to review ALJ decisions has remained relatively constant, and relatively long.  The median age of the proceedings at the time when the Commission completes its review was 524 days in the last six-month period.   This compares to 600 days for the prior six-month period, and 539 days for the same six-month period from 2013.