Section 77a - Short title

30 Analyses of this statute by attorneys

  1. U.S. Supreme Court Unanimously Rules On Standing Requirements For Section 11 Claims In Direct Listings

    King & SpaldingB. Warren PopeJune 7, 2023

    olders would be allowed to sell their unregistered shares to the public upon the listing of the registered shares. In this respect, Slack’s direct listing was different than a typical IPO where an underwriter might require preexisting company shareholders to enter “lockup” agreements to prevent the sale of unregistered shares for a period of time. Ultimately, Slack’s direct listing involved 118 million registered and 165 million unregistered shares.A few months after Slack’s direct listing, the Company’s stock price declined, and a stockholder filed a putative securities class action lawsuit against the Company, certain of its officers and directors, and certain venture capital firms that sold stock in the direct listing. The stockholder alleged that he purchased shares on June 20, 2019 (the first day of Slack’s direct listing) and that he purchased additional shares over the following months. He alleged violations of Sections 11, 12, and 15 of the Securities Act of 1933 (“1933 Act”), 15 U.S.C. § 77a, et seq., based upon alleged misstatements and omissions in Slack’s registration statement.THE DISTRICT COURT AND NINTH CIRCUIT OPINIONSThe defendants moved to dismiss, arguing in relevant part that the plaintiff had not, and could not, plead standing to bring his 1933 Act claims, citing case law requiring the plaintiff to “trace” his shares back to the challenged registration statement. In a traditional IPO, where registered shares are sold first, and unregistered shares are subject to lockup agreements for a period of time, a plaintiff might be able to trace purchases of shares that were made during the lockup period back to the registration statement. But in Slack’s direct listing, “the impossibility of tracing beg[an] on the very first day of listing due to the simultaneous offering of unregistered and registered shares.” See Pirani v. Slack Technologies, Inc., 445 F. Supp. 3d 367, 379 (N.D. Cal. 2020).The district court considered this “unique circumstance” to present an issue of

  2. Kim Kardashian Sanctioned by SEC for Unlawful Touting of Cryptocurrency

    Bilzin SumbergShalia SakonaOctober 6, 2022

    onsored by Senators Cynthia M. Lummis (R-WY) and Kirsten Gillibrand (D-NY). The dense billendeavors to establish a regulatory framework for “digital assets,” (i.e., cryptocurrency and NFTs), including by amending certain existing federal legislation to bring digital assets within their purview. According to its sponsors, the Bill attempts to “make[ ] a clear distinction between digital assets that are commodities or securities by examining the rights or powers conveyed to the consumer, giving digital asset companies the ability to determine what their regulatory obligations will be and giving regulators the clarity they need to enforce existing commodities and securities laws, bringing digital assets into the regulatory perimeter from the current vacuum.” Section 205(e) of the Bill, concerning taxation of digital assets, provides that it shall not “be construed to create any inference with respect to the classification of any digital asset as security under the Securities Act of 1933 (15 U.S.C. 77a et seq.) or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)[,]” leaving that question open for another day and forum.Monday’s Kardashian Order adds EthereumMax to a growing list of cryptocurrencies that the SEC has treated as a “security” under the Securities Act of 1933. Thus, while the Kardashian Order could mean that Ms. Kardashian’s legal career is over before it began, it also signals that the regulation of cryptocurrency—including as “securities” subject to the requirements of the Securities Act of 1933 and/or the Securities Exchange Act of 1934—is just getting started.

  3. Dragonchain Sued by SEC Amidst Crypto Crackdown – Charged with Illegal Unregistered Securities Offerings

    Montague LawJohn MontagueOctober 6, 2022

    3, 2022, 11:30 AM), https://www.vox.com/recode/2022/8/3/23290388/crypto-illegal-scams-lawsuit-sec2About Dragonchain, https://dragonchain.com/about/ (last visited August 24, 2022) 3S.E.C. v. Dragonchain, Inc. et al., No. 2:22-cv-01145, W.D. Wa. filed August 16, 2022, https://www.sec.gov/litigation/complaints/2022/comp25468.pdf.4Dragonchain, Fundamentals (2017), https://docs.google.com/presentation/d/10Zhvs4R7cJqUvv7Q5h1gLHr7R6i0Wo59nXGTPED3nPg/htmlpresent. The Fundamentals document provided by DC in 2017 defines the Dragon as “a tokenized micro-license (PATENT PENDING) for interaction with Dragonchain’s commercial platform services which captures legal guidance regarding US Securities law.” It also includes a disclaimer stating, “Dragon is not a financial security and should not be purchased for investment or speculative purposes. Purchasers of Dragons should have a bona fide intention to use them for interaction with the Dragonchain platform,” 5The Securities Act of 1933, as amended, 15 USCS § 77a et seq.; Section 5 of the Act mandates that any issuer of non-exempt securities to the public must register offers and sales with the Securities and Exchange Commission (SEC); the absence of such registration deems any subsequent offer and sale unlawful and subject to liability; Legal Information institute, The Securities Act of 1933, Cornell Law School, https://www.law.cornell.edu/wex/securities_act_of_1933. “The goal is to provide investors with accurate information so that they can make informed investment decisions.” 6Hybrid Blockchain Platform for Flexibility, Scalability, and Security,https://dragonchain.com/blockchain-platform(last visited August 24, 2022). 7Dragonchain™, Originally Developed at Disney, Announces October 2nd ICO to Simplify Blockchain Technology for Business Use, BusinessWire (Sep. 20, 2017, 3:00 AM), https://www.businesswire.com/news/home/20170920005471/en/Dragonchain™-Originally-Developed-Disney-Announces-October-2nd8Id.9Todd Bishop, SEC sues Dragonchain, all

  4. What is Securities Law?

    Montague LawJohn MontagueOctober 3, 2022

    ge digital asset space and are calling for new legislation.29It is recommended that any issuer of cryptocurrency token confer with a securities attorney for securities compliance. Attorneys and firms who specialize in securities law, such as Montague Law, can assist you in assuring all aspects of your business are compliance with both federal and state regulation.Concluding RemarksSecurities laws are complex and can be difficult to navigate, but they are vital to ensure investment protection and safe and fair securities transactions. It is often said that history repeats itself, however the establishment of securities laws and the SEC seek to ensure that the fraudulent market proceedings seen in the 1920s will not have the opportunity to emerge again.1 Practical Law Corporate & Securities, US Securities Laws: Overview, Thomson Reuters Practical Law (last visited Sep. 30, 2022), WL 3-383-6798.2SEC v. W.J. Howey Co., 328 U.S. 293, 299 (1946).3 The Securities Act of 1933, as amended, 15 USCS § 77a et seq.4 Practical Law Corporate & Securities, Security Defined, Thomson Reuters Practical Law (last visited Sep. 30, 2022), WL 0-578-9965.5 Securities Exchange Act of 1934, 15 U.S.C. § 78c-qq (1934).6Supra note 4.7 Supra note 1.8 Legal Information Institute, Securities Law History, Cornell Law School (last visited Sep. 30, 2022), https://www.law.cornell.edu/wex/securities_law_history.9 H.R. Rep. No. 85, 73RD Cong., 1ST Sess. 1933, 1933 WL 983 (Leg.Hist.)10See 328 U.S. 293 (1946)11Supra note 4.12 15 USCS § 77a13 Supra note 4.14Supra note 2.15Supra note 1.16 Practical Law, Registration Statement, Glossary (last accessed Sep. 30, 2022), WL 4-382-3743. “In connection with a public offering of securities, an issuer must prepare a registration statement to give potential investors a reasonable basis upon which to make an investment decision. Rule 404(a) of the Securities Act states that a registration statement consists of the following: (i) the facing sheet of the applicable

  5. Federal Regulation of Securities Committee of the Business Law Section of the American Bar Association Takes Aim at SEC Proposed SPAC Rules

    ArentFox SchiffJune 22, 2022

    The positions advanced in the ABA Letter represent the views of the Committee and the Authors and do not represent the views of the ABA’s House of Delegates or Board of Governors or the law firms and other organizations with which the Authors are associated. 15 U.S.C. §77a.[View source.]

  6. US SEC’s Climate Risk Disclosure Proposal Likely to Face Legal Challenges

    Mayer Brown Free Writings + PerspectivesApril 22, 2022

    gov/imo/media/doc/SEC ClimateDisclosure Letter.pdf?cb; Forty Congressional Members’ Letter to SEC Secretary Vanessa A. Countryman (Apr. 11, 2022), https://www.sec.gov/comments/s7-10-22/s71022-20123081-279409.pdf.7 State Attorneys General Letter, supra note 5.8 Securities Act of 1933, 15 U.S.C. §§ 77a, et seq.; Securities Exchange Act of 1934, 15 U.S.C. §§ 78a, et seq.9 15 U.S.C. §§ 77g(a)(1), 78l(b)(1); see also id. § 78m(a) (“as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security”).10Id. §§ 77b(b), 78c(f); see also id. § 78w(a)(2). The SEC has interpreted its authority as cabined by its “core mission to promote investor protection, market efficiency and competition, and capital formation.”

  7. First Judicial District Assigns All Securities Act of 1933 Matters to Hon. Andrew Borrok

    Patterson Belknap Webb & Tyler LLPJacqueline BonneauFebruary 4, 2022

    On December 30, 2021, Administrative Judge Deborah A. Kaplan of the First Judicial District announced that, for judicial economy, any pending actions or future actions commenced pursuant to The Securities Act of 1933 (15 U.S.C. § 77a et seq) shall be assigned to the Hon. Andrew Borrok of the New York County Commercial Division. These types of cases, by their nature, are typically assigned to the Commercial Division when filed in state court.

  8. Crypto Executives Meet With House Committee on Finance to Discuss Regulation and the Future of the Digital Assets Market

    Lowenstein Sandler LLPCarly ColemanDecember 15, 2021

    Memorandum: December 8, 2021, Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States, 3 (Dec. 3, 2021), https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-20211208-sd002.pdf.Id. at 1.Id. at 3. 15 U.S.C. § 77a et seq.SEC v. W.J. Howey Co., 328 U.S. 293 (1946).Id.Framework for “Investment Contract” Analysis of Digital Assets, SEC, https://www.sec.gov/files/dlt-framework.pdf (last modified Apr. 3, 2019) (hereinafter, “Framework”). 328 U.S. 293.See Framework.Hearings.Id.Id.

  9. In the Wake of the Pandora’s Box Opened by the Supreme Court’s Cyan Decision, Court to Address Discovery Stay Question in State Securities Act Cases

    Seyfarth Shaw LLPGregory MarkelJuly 14, 2021

    See House Report; 15 U.S.C. § 77z-1(b)(1).See Senate Report.See 15 U.S.C.A. § 77z-1(b)(1); 15 U.S.C. § 77a.

  10. Congress Confirms SEC's Disgorgement Power: Recovery for Investors or Revenue for Government?

    Arnall Golden Gregory LLPAdriaen Morse Jr.January 20, 2021

    [12] SEC v. Texas Gulf Sulphur Co., 446 F.2d 1301, 1307 (2d. Cir. 1970) (“TSG II-CA”) (this was the factual liability and remedy phase of the case in which insider trading was deemed to violate fraud provisions of the Exchange Act).[13] SEC v.Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. 1968) (en banc), cert. denied, Coates v. SEC, 394 U.S. 976 (1969) (“TSG I-CA”).[14] SEC v. Texas Gulf Sulphur Co., 258 F. Supp. 262 (S.D.N.Y. 1966) (“TSG I-DC”).[15] Later, the Liu Court stated, “Congress passed the Securities Act of 1933, 48 Stat. 74, as amended, 15 U.S.C. § 77a et seq., and the Securities and Exchange Act of 1934, 48 Stat. 881, as amended, 15 U.S.C. § 78a et seq., and to punish securities fraud through administrative and civil proceedings.” Liu, supra note 8, at 1940 (emphasis added).