646.970.0610
April 16, 2020 | By Patrick T. McCloskey
On April 6, 2020 New York State Attorney General Letitia James announced sweeping proposed amendments to the regulations governing state registration of securities brokers and dealers, including issuers that are considered are dealers of their own securities under Section 359-e[1](a) of the New York General Business Law (the “GBL”).1 The proposed amendments were published in the New York State Register on April 15, 2020 and are subject to a 60-day public comment period.
The amendments include fundamental changes that, if adopted, will (i) result in the SEC’s Form D satisfying New York’s blue sky filing requirements for Rule 506 offerings2 and (ii) require finders, as defined under the amended regulations, to register as broker-dealers.
Rule 506 Alignment
Under the modified regulations, Form D filings for Rule 506 offerings, once made with the Department of Law, will satisfy the applicable issuer’s blue sky filing requirements under Section 359-e of the GBL. Such filings will have the same timing deadline as set forth in Regulation D3 and, like most other states,4 be made through the North American Securities Administrators Association’s (NASAA’s) electronic filing depository system (the “EFD”), as soon as such capability is approved by the Department of Law.
Currently, issuers conducting a Rule 506 offering within or from New York are required to mail a Form 99 or, if elected by the issuer, a Form M-11, with the Investor Protection Bureau (IPB) of the Department of Law, with the applicable filing fee payable by check or money order.5 In light of the COVID-19 outbreak, on March 24, 2020 the NYAG announced that an electronic version of such filings must now precede the physical mailing.6
The alignment of New York’s blue sky filing requirements with the federal regulations for Rule 506 offerings has been a long time coming for securities law practitioners and their clients. In 2002, the New York State Bar Association’s (NYSBA’s) Committee on Securities Regulation published a position paper concluding that New York’s filing requirements for Rule 506 offerings were inconsistent with the National Securities Markets Improvements Act of 1996 (“NSMIA”), which amended Section 18 of the 1933 Act to preempt state securities registration of transactions exempt under Rule 506.7 This position paper also requested that the NYAG revise its filing requirements consistent with NSMIA. Eighteen years later, the summary of the proposed modified regulations acknowledge that “the policies and practices of [the Department of Law] have not kept pace with all of the developments in state and federal securities regulation since the enactment of the National Securities Markets Improvement Act in 1996.”8
The NYSBA’s position paper went even further to conclude that no New York blue sky filings were required under Section 359-e of the GBL for any offering exempt under Section 4(a)(2) of the Securities Act, on the theory that GBL Section 359-e only applies to public offerings. This position was never countenanced by the NYAG, and the publication in the New York State Register makes it clear that the NYAG disagrees with it. The published notice provides:
Under the proposed regulatory revisions, certain securities issuers qualifying as dealers, that may have misinterpreted the existing regulations as inapplicable, will now be explicitly compelled to file with the State and pay filing fees.
The NYAG’s staff apparently reviewed publicly available Form Ds to determine which issuers offered securities in New York without making a Form 99 or Form M-11 filing or paying the applicable filing fees ($300 for offerings of $500,000 or less and $1,200 for offerings of more than $500,000),9 concluding that approximately 5,500 issuers fall into this category but acknowledging that some may not have been “dealers” within the meaning of GBL 359-e[1](a). The published notice states:
Based on a review of data related to form D filings stating that securities would be offered in New York state, there could be approximately 5,500 issuers that would notice and pay fees under this rule. Such estimate could be materially reduced as certain of these filers may not satisfy the definition of dealer under GBL § 359-e(1)(a) and thus may not be required to file under the rules.
It appears from the above language that the NYAG may expect the affected issuers within this category to retroactively file a Form D with the Department of Law and pay the applicable fee. If that is indeed the case, such issuers would need to first analyze whether they were GBL § 359-e[1](a) dealers at the time of the applicable offering and, if so, whether an exemption was available under GBL § 359-f[2]. As an example, an affected issuer that was, at the time of the offering, a dealer under GBL § 359-e[1](a) could apply for a limited offering exemption under GBL § 359-f[2](d) (sales to not more than forty persons, or more if the NYAG deems it within the purposes of the exemption). The fee for that application would be $300 and, assuming the exemption is granted by the NYAG, the issuer would be excused from filing the Form D and paying that filing fee (which would be $300 or $1,200, depending on the size of the offering). An application for such an exemption has specific requirements that are set forth in the NYAG’s Exemption Instruction Sheet.
The most onerous characteristic of the legacy Form 99 filing requirement for Rule 506 offerings is the timing. Currently, the Form 99 must be filed before any sales or offers are made in New York.10 Since the federal deadline for the Form D is 15 calendar days after the first sale, the existing New York timing requirement has been disruptive for issuers conducting Rule 506 offerings that include New York.11 The timing alignment of the modified regulations for Rule 506 offerings will finally alleviate this disruption. Another Rule 506 alignment feature of the proposed regulation amendments is the elimination of the State Notice and Further State Notice filing requirement. Currently, these forms need to be separately filed with the Department of State in Albany (not the IPB in NYC), together with payment of the related fees. Consistent with Section 18(c)(2)(A) of the 1933 Act, non-resident Rule 506 issuers will still need to file a Form U-2 Uniform Consent to Service of Process Form with the Department of State, together with a $35 filing fee.12
Harmonization of the New York and federal rules is one of the articulated purposes of the modified regulations.13 This concept is also being embraced at the federal level. On June 18, 2019 the SEC published a concept release soliciting public comment “on possible ways to simplify, harmonize, and improve the exempt offering framework to promote capital formation and expand investment opportunities while maintaining appropriate investor protections.”14 In furtherance of the harmonization release, on March 4, 2020 the SEC published a proposing release with amendments to certain federal exemptions, with public comments due by June 1, 2020.15
The Modified Regulations
The NYAG’s authority to modify the existing regulations is derived from Section 359-e[10] of the GBL, which empowers the NYAG to, among other things, modify or rescind forms governing registration applications, classify securities, persons and matters, and proscribe forms and requirements for such different classes,16 and Section 359-e[13](a), under which the NYAG may provide an alternative method of registration by which dealers engaging in multi-state securities offerings may supply the information required under Section 359-e of the GBL.17
Federal Regulation D Covered Securities
The modified regulations establish a new classification of “Federal Regulation D Covered Securities”18 with a corresponding definition of “Federal Regulation D Covered Securities Dealer.”19 Once effective, a so-called Federal Regulation D Covered Securities Dealer will satisfy its filing requirement under Section 359-e of the GBL by filing a Form D with the Department of Law within 15 calendar days of the date of first sale of securities issued by such dealer.20 These Form D filings and payment of the related filing fees are to be made through NASAA’s EFD system “as soon as such capability is approved by the Department of Law.”21 Such Form D filings would be effective for four years, but if a Federal Regulation D Covered Securities Dealer files another Form D or Form D/A during that period with information different from what was initially filed, then such Form D or Form D/A, as applicable, must also be filed with the Department of Law.22
Although the proposed amendments do not specify whether Rule 506 issuers will still be required to provide a copy of the offering documents to the IPB,23 since this would be inconsistent with the spirit of alignment with the federal filing requirements, one would expect this directive to be dropped. This often-overlooked issue is potentially significant because offering documents provided to the IPB are available to the public through a Freedom of Information Law (FOIL) request.24
In addition to securities sold in Rule 506 offerings, a Federal Regulation D Covered Security will also include any security resold in a transaction exempt from registration under Section 4(a)(7) of the Securities Act (a recently enacted resale exemption akin to the so-called “4(1)(1/2) exemption”),25 as well as any security offered in a transaction exempt under a future rule promulgated by the Securities and Exchange Commission under Section 4(a)(2) of the Securities Act.26
Rule 504, Regulation A–Tier 1 and Section 4(a)(2)
The proposed regulation amendments do not affect the New York blue sky filing regime for (i) Rule 504 offerings,27 (ii) Regulation A–Tier 1 offerings or (iii) private placements relying on the Section 4(a)(2) exemption instead of a safe harbor. The securities offered in these transactions28 are not covered securities under Section 18(b) of the 1933 Act and, as such, issuers conducting such offerings from or within New York will still need to comply with the existing panoply of registration documents, including the Form M-11 (with offering literature),29 the State Notice and Further State Notice and, if applicable, the Form U-2 Consent to Service of Process.
Other New Classifications
The proposed modified regulations also create two other separate classifications for (i) “Federal Tier 2 Securities,”30 with a corresponding definition of “Federal Tier 2 Dealer”,31 and (ii) “Federal Covered Investment Company Securities”,32 with a corresponding definition of “Federal Covered Investment Company Dealer”,33 each with modified registration mechanics that are substantially similar to the one proposed for Federal Regulation D Covered Securities Dealers.
For a Federal Tier 2 Dealer, the GBL Section 359-e requirement will be satisfied by filing a Uniform Notice Filing of Regulation A – Tier 2 Offering Form34 with the Department of Law, together with payment of the applicable fee, not less than 21 calendar days prior to the qualification by the SEC of any securities issued or to be issued by such dealer.35 As the term suggests, Federal Tier 2 Securities include securities offered in a transaction exempt under Regulation A–Tier 2.36 Issuers relying on the Regulation A – Tier 2 exemption can offer and sell up to $50 million of securities in a 12-month period,37 but are subject to public periodic reporting requirements, including audited financial statements on an annual basis.38
For a Federal Covered Investment Company Dealer, the GBL Section 359-e filing requirement will be satisfied by filing a Uniform Investment Company Notice Filing, known as Form NF,39 with the Department of Law prior to the sale of any Federal Covered Investment Company Securities issued or to be issued by such dealer.40 Federal Covered Investment Company Securities are securities that are issued by a company that is registered, or that has filed a registration statement, under the Investment Company Act of 1940.41
Registration Requirement for Finders
Another significant addition in the proposed modified regulations is the new concept of a “finder” and an express requirement that finders register as broker-dealers in New York. Under the modified regulations, as proposed, a finder will be defined as “any person, firm, association, or corporation who as part of a regular business, engages in the business of effecting transactions for the account of others within or from [New York], to the limited extent that such person, firm, association, or corporation, receives compensation for introducing a prospective investor or investors to any broker, dealer or salesperson.”42 The definition specifically provides that finders “shall be subject to all of the filing and exam requirements of brokers, broker-dealers, and salespersons under [13 NYCRR Part 10] and GBL § 359-e.43 Finders not associated with a registered broker-dealer will be required to register by filing a Form M-1, while finders associated with a non-FINRA member broker-dealer will need to register on Form M-2 and finders associated with a FINRA member broker-dealer will be permitted to register on a Form U4.44
The distinction between a finder and a registered broker-dealer has been a bone of contention at the federal level for quite some time. Finders have typically argued that mere introduction of investors to an issuer is not sufficient activity to require broker-dealer registration, which triggers extensive obligations, restrictions, oversight and, of course, expenses.45 While courts examining the issue have applied a multi-factor test,46 the SEC has given special attention to “transaction-based compensation”, which gives the finder a “salesperson’s stake” in the transaction, thereby raising regulatory oversight concerns.47 In 2019 an action was commenced against the SEC seeking a declaration that the plaintiff’s finder activities (and similar business models) do not require broker-dealer registration under the 1934 Act”.48 Interestingly, the SEC’s harmonization release in June 2019 indicated, in a footnote, that the Division of Trading and Markets is reviewing the issue.49 Based upon the tension at the federal level, one would expect the proposed finder registration requirement in New York to attract significant public comment before the modified regulations become effective. California adopted a finder’s exception to its broker-dealer registration requirements in 2016,50 but the issue at the federal level limits the practical utility of the exemption to intrastate transactions.
Compliance with New York’s blue sky laws should not be taken lightly. The NYAG has broad enforcement powers under the Martin Act, which has been described as “the legal equivalent of a weapon of mass destruction.”51 The statute of limitations for enforcement actions by the NYAG under the Martin Act was recently increased from three years to six years,52 and Rule 504, Rule 506 and Regulation A all contain “bad actor” disqualification rules that can be triggered by certain enforcement orders by state securities administrators.
This blog post is for general informational purposes only and does not constitute legal advice. No one should rely on the information in this blog post without seeking appropriate legal, accounting, tax or other appropriate advice from an attorney, accountant or other professional properly licensed in the applicable jurisdiction(s).
_________
1The proposed amendments also modify the regulations governing the registration of investment advisers (13 NYCRR Part 11) under Section 359-eee of the GBL. While this article does not address the proposed modified regulations for investment advisers, the text of these proposed amendments can be accessed here.
2Rule 506(b) and Rule 506(c) under the Securities Act of 1933, as amended (the “1933 Act”), are safe harbors for the registration exemption set forth in Section 4(a)(2) of the 1933 Act (transactions by an issuer not involving any public offering).
3Rule 503 under the 1933 Act requires Form D filings to be made no later than 15 calendar days after the date of the first sale.
4A list of states currently participating in NASAA’s electronic filing system for Form Ds is accessible here.
5An issuer is excused from such filings to the extent (i) such issuer excepted from the definition of “dealer” in Section 359-e[1](a) of the GBL or (ii) the applicable securities or the applicable offering is exempt under Section 359-f[2] of the GBL.
6The Firm’s blog post summarizing these new filing procedures can be accessed here.
7See Private Offering Exemptions and Exclusions Under the New York State Martin Act and Section 18 of the Securities Act of 1933, by the Committee on Securities Regulation of the New York State Bar Association (2002).
8The summary also provides “[b]ecause of the passage of time and the evolution of national registration processes and technology, and due to some confusion within the industry, these Regulations require updating.”
9No changes to the filing fees are contemplated by the proposed regulation amendments.
10See GBL § 359-e[3] (“[i]t shall be unlawful for any dealer . . . to sell or offer for sale to . . . the public within or from this state, any securities issued or to be issued, unless and until such dealer . . . shall have filed with the department of law a registration statement as provided herein.”) See also GBL § 359-e[9] (“[a] broker-dealer registration statement or other document is filed when it is received in the New York City office of the attorney general.”)
11Currently, the instructions to the Form 99 provide that an issuer must include a copy of the applicable Form D “in draft form” and subsequently submit an “as-filed” copy once the filing is later made with the SEC. See Form 99.
12See Section 18(c)(2)(A) of the 1933 Act (“[n]othing in this section prohibits the securities commission of any State from requiring the filing of any document filed with the Commission pursuant to this subchapter, together with annual or periodic reports of the value of the securities sold or offered to be sold to persons located in the State (if such sales data is not included in documents filed with the Commission), solely for notice purposes and the assessment of any fee, together with a consent to service of process and any required fee.”) (Italics added).
13The summary provides, in pertinent part “[i]n the revised [13 NYCRR] Part 10, the Attorney General classifies securities and dealers for the purpose of directing filing of forms to New York through EFD and to further harmonize New York and federal registration laws.”
14See SEC Release No. 33-10649 (June 18, 2019).
15See SEC Release No. 33-10763 (March 4, 2020).
16See GBL § 359-e[10] (“[t]he attorney-general may from time to time in the public interest make, amend, and rescind such forms as are necessary to carry out the provisions of this act, including forms governing registration statements and applications. For the purpose of forms, the attorney-general may classify securities, persons and matters within his jurisdiction, and may prescribe different forms and requirements for different classes.”)
17See GBL § 359-e[13](a) (“[t]he attorney general may by regulation, rule or order provide an alternative method of registration by which any dealer . . . who engages in multi-state securities offerings may supply the information otherwise required to be furnished in the state notice, registration statement, supplemental statements and further state notice mandated by subdivisions two, three, four and eight of this section.”) The NYAG’s publication notice in the New York State Register provides “[t]he Attorney General has also explored implementing these regulations by order as authorized under GBL § 359-e. Rather than proceed by order, the Attorney General has chosen to seek public comment related to these revisions.”)
18See proposed 13 NYCRR §10.10(a)(4) (“Federal Regulation D Covered Securities” are any security or securities that meet the definition of covered securities, or that will meet such definition upon completion of the transaction, under Sections 18(b)(4)(F) and 18(b)(4)(G) of [the 1933 Act].) Since Section 18(b)(4)(F) is a reference to an issuer exemption (Rule 506) and 18(b)(4)(G) is a reference to a non-issuer resale exemption (Section 4(a)(7)), it would appear the disjunctive “or” was intended at the end of this definition, rather than the conjunctive “and”.
19See proposed 13 NYCRR §10.10(a)(5) (“Federal Regulation D Covered Securities Dealer” is any person, firm, association or corporation satisfying the definition of dealer under GBL § 359-e (1)(a) that offers or sells Federal Regulation D Covered Securities.)
20See proposed 13 NYCRR §10.11(b) (“Federal Regulation D Covered Securities Dealers must satisfy the initial statement, state notice and further state notice requirements of GBL § 359-e by filing a completed Form D, along with the fees designated in this part with the Department of Law within 15 days of the date of the first sale of any securities issued or to be issued by such dealer. Such filings shall be valid for a period of four years.”)
21See proposed 13 NYCRR §10.11(b).
22See proposed 13 NYCRR §10.3(d) (“Each Federal Regulation D Covered Securities Dealer, having already filed a Form D in the Department of Law within the past 4 years, shall file a copy of any subsequent Form D or Form D/A filed with the U.S. Securities and Exchange Commission if such form contains any information that differs from the information previously filed with the Department of Law within the past 4 years. Such supplemental Form D/A filing shall constitute a supplemental statement under GBL § 359-e (1)).” Under proposed 13 NYCRR §10.3(g), supplemental statements are due “within 30 days of the event warranting the supplement, except with regard to information about injunctions and other proceedings which must be made as soon as practicable.”
23The NYAG currently takes the position that offering literature must be included with a Form 99 or Form M-11 filing). See Broker-Dealer And Securities Registration Information Sheet (I. Issuers of Securities. F. “Offering literature must be included with the M-11 and Form 99. There is no N.Y. requirement for any prospectus or offering literature to be specifically prepared. If there is none, none be submitted.”) https://ag.ny.gov/investor-protection/broker-dealer-and-securities-registration-information-sheet. In the current version of the Form 99, “Offering Documents” are defined as “[a]ny printed materials in which are presented, without limitation, the terms of the transaction, a description of the securities offered, the operative documents for the entity which may be formed, any supporting documents and/or the subscription instruments for the investor.”)
24See Brokers, Dealers and Salespersons, Frequently Asked Questions “Question: Is the information in the Memorandum or the offering literature private? Can the public view it? Answer: the offering literature of [sic] memorandum is public information. The department will consider a request by the filer to withhold certain information such as trade secrets.” https://ag.ny.gov/investor-protection/brokers-dealers-salespersons See also Form 99 (“The Office of the Attorney General is subject to Article 6 of the Public Officers Law §§84-89 which is the New York Freedom of Information Law (“FOIL”). As such, certain information provided herein may be disclosed to third parties consistent with the Office’s FOIL obligation. Pursuant to FOIL, certain personal information such as social security numbers, tax ID numbers, dates of birth and residential addresses is exempt from disclosure.”)
25The so-called “4(1)(1/2) exemption” is not contained in any statute or regulation, but the phrase has been widely used by securities law practitioners to support the notion that resales by affiliates of the issuer, who might otherwise be deemed an underwriter under Section 4(a)(1) of the 1933 Act, should be exempt if made in compliance with Rule 4(a)(2) of the Securities Act.
26See proposed 13 NYCRR §10.10(a)(4). See also Section 18(b)(4)(F) and (G) of the 1933 Act.
27Although Rule 504 offerings require a Form D filing at the federal level, the securities offered and sold in such transactions are not covered securities under Section 18(b)(4)(F). As such, Rule 504 issuers that are dealers as defined in Section 359-e[1] of the GBL are subject to the registration requirements described Section 359-e of the GBL and the applicable regulations under 13 NYCRR Part 10.
28Rule 504, Regulation A–Tier 1 and Section 4(a)(2) are specifically referenced because these are the most frequently relied upon exemptions for offerings of non-covered securities.
29If offering literature is not included with a Form M-11, a letter of explanation must be attached. See Form M-11.
30See proposed 13 NYCRR §10.10(a)(6) (“Federal Tier 2 Securities” are any security or securities that meet the definition of covered securities, or that will meet such definition upon completion of the transaction, under Section 18(b)(3) or (b)(4)(D)(ii) of [the 1933 Act]).
31See proposed 13 NYCRR §10.10(a)(7) (“Federal Tier 2 Dealer” is any person, firm, association or corporation satisfying the definition of dealer under GBL §359-e (1)(a) that offers or sells Federal Tier 2 Securities.)
32See proposed 13 NYCRR §10.10(a)(2) (“Federal Covered Investment Company Securities” are any security or securities that meet the definition of covered securities, or that will meet such definition upon completion of the transaction, under Section 18(b)(2) of [the 1933 Act].)
33See proposed 13 NYCRR §10.10(a)(3) (“Federal Covered Investment Company Dealer” is any person, firm, association or corporation satisfying the definition of dealer under GBL § 359-e (1)(a) that offers or sells Federal Covered Investment Company Securities.)
34A copy of the Uniform Notice Filing of Regulation A – Tier 2 Offering Form is accessible on the NASAA’s website here.
35See proposed 13 NYCRR §10.11(c). Proposed 13 NYCRR §10.11(c)(1) provides (“[t]he [NYAG’s] Department of Law shall accept paper filings and payments of fees until such time as the Department of Law designates a system for exclusive electronic filings and payments.”) Proposed 13 NYCRR §10.11(c)(2) provides (“[u]pon availability of the EFD system to accept the Uniform Notice Filing of Regulation A – Tier 2 Offering Form, and the Department of Law’s implementation of EFD, filings and payments shall be made through the EFD system.”)
36See Note 30, supra. See also Rule 256 under the 1933 Act (“[f]or purposes of Section 18(b)(3) of the Securities Act, a “qualified purchaser” means any person to whom securities are offered or sold pursuant to a Tier 2 offering of this Regulation A”).
37In SEC Release No. 33-10763 (March 4, 2020), the SEC has proposed to increase the $50 million limit to $75 million.
38See Rule 257(b) under the 1933 Act.
39A copy of the Form NF is accessible on the NASAA’s website here.
40Proposed 13 NYCRR §10.11(a)(1) provides (“[t]he [NYAG’s] Department of Law shall accept electronic or paper filings and payments until such time as the Department of Law designates a system for exclusive electronic filings.” The [NYAG] Department of Law may accept filings exclusively through the North American Association of Securities Administrators [sic] (“NASAA”) Electronic Filing System (EFS) as soon as capability is available, approved and implemented by the Department of Law.”)
41See proposed 13 NYCRR §10.10(a)(2), (“Federal Covered Investment Company Securities” are [any] securities that meet the definition of covered securities, or that will meet such definition upon completion of the transaction, under Section 18(b)(2) of [the 1933 Act]).” Section 18(b)(2) of the 1933 Act provides, in pertinent part, “[a] security is a covered security if such security is a security issued by an investment company that is registered, or has filed a registration statement, under the Investment Company Act of 1940.”
42See proposed 13 NYCRR §10.10(a)(8).
43Id.
44See proposed 13 NYCRR §10.1(a)(6) (“[a]ll finders not associated with a registered broker-dealer shall file Form M-1 and shall follow the supplemental file requirements of broker-dealers herein. Finders associated with a non-FINRA member broker-dealer shall file Form M-2. Finders associated with a FINRA member broker-dealer shall file Form U4. Finder registration periods for non-FINRA members are for four (4) years. Finder registrations for FINRA members shall follow registration requirements in 10.2 for broker-dealers or salespersons, as appropriate.”)
45See Section 15(a)(1) of the Securities Exchange Act of 1934, as amended (the “1934 Act”).
46See, e.g., United States Securities and Exchange Commission v. Collyard 861 F.3d 760 (8th Cir. 2017); See also S.E.C. v. Kramer 778 F.Supp.2d 1380 (M.D. Florida 2011).
47See, e.g., In Re Edward Shaw, LLC SEC Release No. 34-82805 (March 5, 2018), SEC Press Release No. 2018-30 (March 5, 2018)–SEC Charges Unregistered Broker For Illegally Brokering Sales of EB-5 Securities (“[f]or each successful investment, Edwin Shaw received a fee ranging from $5,000 to $50,000”). See also SEC No Action Letter, Mr. John R. Wirthlin (January 19, 1999) (“[y]ou would also receive transaction-based compensation, one of the hallmarks of being a broker-dealer”.) See also Revocation of SEC No-Action Letter, Dominion Resources, Inc. (March 7, 2000) (citing numerous No Action Letters declining no action relief due to receipt of transaction fees). One narrow exception to this position is for an “M&A Broker”. See SEC No-Action Letter, M&A Brokers (February 4, 2014).
48See Platform Real Estate Inc. v. United States Securities and Exchange Commission, Case No. 19-CV-2575 (SDNY).
49See Release No. 33-10649, Note 55 (“[t]he status of persons that provide introductions or otherwise solicit potential investors for an issuer (generally, “finders”) is not discussed within this release. The Division of Trading and Markets is reviewing the status finders for purposes of Section 15(a) of the Exchange Act”).
50See California Corporations Code Section 25206.1 (limited to individuals who receive compensation for introducing accredited investors in offerings not exceeding $15 million and subject to other restrictions).
51See Depoliticize the Martin Act—In the wrong attorney general’s hands, the New York statute is a weapon of mass destruction against business, Manny Alicandro, Crains New York Business (September 12, 2018).
52See New Law Strengthens AG James’ Authority To Take On Corporate Misconduct—Statute of Limitations for Martin Act and Executive Law 63(12) Restored to Six Years, NYAG Press Release (August 26, 2019).
