ENDNOTES
1 See IPO Task Force Report, available at
http://www.sec.gov/info/smallbus/acsec/rebuilding_the _ipo_on-ramp.pdf, at 26.
2 See Global Settlement (I)(1):
http://www.sec.gov/litigation/litreleases/finaljudgadda.p df; Finra Rule 2711; NYSE Rule 472.
3 See Global Settlement Addendum A. 4 A research report is defined as a written communication that includes information, opinions or recommendations with respect to securities of an issuer or an analysis of an issuer, whether or not it provides information reasonably sufficient upon which to base an investment decision. Rule 137(e) of the Securities Act.
5 See Adoption of Rules Relating to Publication of Information and Delivery of Prospectus by Broker- Dealers Prior to or After the Filing of a Registration Statement Under the Securities Act of 1933, Securities Act Release No. 33-5101, 1970 WL 10585 (November 19 1970).
6 See, e.g., id. at n.88 (“the publication of information and publicity efforts, made in advance of a proposed financing which have the effect of conditioning the public mind or arousing public interest in the issuer or in its securities constitutes an offer …”) (citing Securities Act Release No. 33-5180, 1971 WL 120474 (August 20 1971)).
7 Section 5(c) of the Securities Act, 15 USC § 77e(c). 8 Section 5(b) of the Securities Act, 15 USC § 77e(b). 9 See the definition of prospectus in section 2(a)(10) of the Securities Act, 15 USC § 77b.
10 Securities Offering Reform Release, No. 33-8591, 2005, WL 1692642 (July 19 2005), at 39–40. Gun- jumping refers to the illegal solicitation of an offer before a registered offering.
11 Reform Release, supra note 10, at 16. 12 Id. at n.55. See also id. at 41–42. 13 See section 2(3) of the Securities Act. 14 See Rules 137–39 of the Securities Act. 15 See Rule 139(b)–(c) of the Securities Act. 16 See SEC Litigation Release No. 18438 (Oct. 31, 2003). 17 Reform Release, supra note 11, at 155. 18 Id. 19 Id. at 156. Research reports issued in reliance on Rule 137, 138, or 139 continue to be subject to the antifraud provisions of the federal securities laws, including liability under section 17(a) of the Securities
Act, section 10(b) of the Exchange Act, and Rule 10b- 5 of the Exchange Act.
20 A blank cheque company is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. SEC Rule 419(a)(2).
21 A shell corporation is a company that serves as a vehicle for business transactions without itself having any significant assets or operations. SEC Rule 405.
22 A penny stock issuer is a very small issuer of low-priced speculative securities. Since penny stocks are difficult to accurately price, there are specific SEC rules that must be satisfied before a broker-dealer can sell a penny stock, and the SEC does not allow the issuer to use certain exemptions from the registration requirements when selling their securities. Exchange Act Rule 3a51-1.
23 Effective as of September 2 2011, the SEC amended Form S-3 and Form F-3 by revising General Instruction IB2 to eliminate the use of credit ratings as a transaction eligibility standard and replace it with an alternative set of standards. The new standards provide that an offering of non-convertible securities is eligible to be registered on Form S-3 or Form F-3 if the issuer meets the Registrant Requirements in General Instruction IA, and either has issued at least $1 billion of non-convertible securities in transactions registered under the Securities Act, other than equity securities, for cash during the past three years, has outstanding at least $750 million of non-convertible securities, other than common equity, issued in primary offerings for cash registered under the Securities Act (each as measured from a date within 60 days of the filing of the registration statement); or is a wholly owned subsidiary of a WKSI.
24 Id. 25 See SEC FAQs, supra note 3 at Question 3. 26 See SEC FAQs, supra note 3 at Question 4. 27 See
http://www.sec.gov/rules/sro/finra/2012/34- 68037.pdf
28 See SEC FAQs, at Question 5. 29 This chart originally appeared in Morrison & Foerster’s Frequently Asked Questions About Separation of Research and Investment Banking.
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