Starting in December, large companies will be able to gauge investor interest in their potential initial public offering (“IPO”) in the same way smaller companies already do. (Ramonas, Bloomberg Law). The U.S. Securities and Exchange Commission (“SEC”) recently voted 5-0 to adopt new regulations under Rule 163B of the Securities Act of 1933 (“Securities Act”), which extend the rule’s “test-the-waters” provisions from emerging growth companies to all companies considering an IPO. (Id.) The ability to gauge institutional investor interest in a potential IPO will help companies better tailor the size and terms of their offerings to the demand of the market and allow companies to avoid the costs of pursuing an IPO if the interest is simply not there.
Read MoreAccording to Paul Schulte, former global head of financial strategy for China Construction bank, China’s Central Bank will launch a state-backed cryptocurrency and issue it to seven institutions in the coming months. (Michael del Castillo, Forbes). Mu Changchun, deputy director of the Paying Division of the People’s Bank of China and the new head of China’s cryptocurrency research lab, described this as a “two-tiered” system wherein the central bank would create the cryptocurrency and a small group of trusted commercial businesses would “pay the central bank 100% in full” to be allowed to distribute it. (Id.) The cryptocurrency will initially be dispersed to the 1.3 billion people and entities doing business with renminbi, China’s fiat currency, but the Central Bank hopes the currency will eventually be made available to spenders in the United States and elsewhere through relationships with correspondent banks in the west. (Id.)
Read MoreThe Securities and Exchange Commission (the “SEC”) and Bitqyck, Inc. and its founders, Bruce E. Bise and Samuel J. Mendez (collectively the “Defendants”) reached a $10.1 million dollar settlement following allegations that the Defendants violated various securities laws in selling investors unregistered digital tokens. (Andrew Ramonas, Bloomberg Law). The SEC’s complaint alleged the Defendants violated the antifraud provisions and the registration requirements of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) and also separately violated the Exchange Act in running an unregistered securities exchange. (SEC Complaint). The settlement resulted in Bitqyck agreeing to pay disgorgement, prejudgment interest, and a civil penalty amounting to approximately $8.4 million, with Bise and Mendez individually paying approximately $890,000 and $850,000, respectively. (Andrew Ramonas, Bloomberg Law). As part of the settlement agreement, Defendants neither admitted nor denied wrongdoing in response to the SEC’s allegations. (Id.).
Read MoreIndirect Purchaser Plaintiffs v. Michael Bednarz (N.D. Cal.); 17-17367 (Ninth Circuit), derives from a multi-district litigation by both direct and indirect purchasers of lithium-ion batteries. The case implicates various manufacturers, including the three companies involved in this appeal: Hitachi Maxell, Ltd., LG Chem, Ltd, and NEC Corporation (the “Companies”). (Dorothy Atkins, Law 360). The litigation addresses the causes of action indirect purchasers have to redress injuries resulting from companies who manufacture components of their final goods sold. (Eleanor Tyler, Bloomberg Law). If this case goes before the Supreme Court, the Court will address indirect purchasers’ ability to redress their injuries.
Read MoreMany believe 2018 was a record year for shareholder activism. Since 2017, the number of activist campaigns increased by 5.5%, with about 268 campaigns announced in total (Melissa Sawyer, Lauren S. Boehmke, and Nathanial R. Ludewig, Harvard Law Review). In 2018, a record amount of capital was deployed in new activist campaigns and an unprecedented number of investors engaged in activism, with the number of first-time activists roughly doubling the 2017 numbers. However, these statistics do not tell the whole story (Melissa Sawyer, Lauren S. Boehmke, and Nathanial R. Ludewig, Sullivan & Cromwell LLP).
Read MoreElon Musk, the eccentric billionaire and aspirant Tony Stark, could find himself back in court after Tesla shareholders have asked the Ninth Circuit Court of Appeals to reinstate their claims against him. (Peter Hayes, Bloomberg Law). The shareholders allege that Mr. Musk personally profited off of a short-swing trade involving Tesla’s acquisition of SolarCity. Id. In July, a federal trial court had dismissed the shareholder’s lawsuit on the grounds that Musk could not be sued under federal securities laws for his actions. Id. The shareholders subsequently filed an appeal the following month. Id. This post will examine Tesla’s acquisition of SolarCity, the role that Elon Musk holds in each company and what the shareholder lawsuit is challenging.
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