TheCorporateCounsel.net

We’re excited to announce three new resources for those grappling with Section 16:

1. “Section 16 Tales” – A Section 16 Beginner’s Manual – a 200-page paperback – filled with practical stories from in-house practitioners. Includes the “soft stuff” – practical guidance not found in the rules. Here’s a list of the 16 chapters in this paperback.

2. “Section 16 Bootcamp” – A combination of three resources for Section 16 beginners, including 13 online videos, copy of the “Section 16 Tales” paperback & the ability to attend a Section 16 Forum.

3. “Section 16 Forums” – A one-day event for all Section 16 practitioners – not just beginners – facilitating education & networking among your peers – one will be held on each coast, each year.

Cross-Border Conflict Over Analyst Research

Here’s the intro from this WSJ article by Dave Michaels:

The SEC is weighing how to alleviate the harshest side effects of a European Union law that could have U.S. repercussions for banks trying to comply with it. The EU law, which goes into effect in January, will require investors to pay directly for investment research provided by banks’ brokerage arms. The EU measure aims to make research costs more transparent for end investors by breaking them out separately from the trading commissions that investment firms pay.

Yet U.S. law discourages paying for research directly by imposing stricter legal obligations on brokers that accept separate payment for research. U.S. rules have for many years accommodated the current arrangement, which dates to an era when commissions were fixed by exchange rules and brokers competed by offering extra services such as research reports. The extra responsibilities would entail higher legal costs and complicate brokers’ roles as sellers of stocks and bonds, according to industry officials. Wall Street wants to avoid that outcome, and two Republican lawmakers took up their cause on Tuesday at a Senate budget hearing by urging SEC Chairman Jay Clayton to find a solution.

Cryptocurrency: What’s a “Security”?

Not sure I fully understand this article on “tokens” and other emerging digital currencies (think “blockchain” & “bitcoin”) – but reading #6 & 7 in the piece seems to indicate that the securities law might not apply to them. Here’s ten cents about this from John:

I think the author is saying that as conceived, these tokens/API keys aren’t securities. Since that’s the case, they qualify for application of the “Tulip Test,” which I learned from an analyst back in the ’90s. It says that whenever you don’t understand a technobabble sales pitch for a world-changing, non-traditional investment, try substituting the word “tulip” or “beanie baby” for the magic word in the article (i.e. “token” and “API Key”) and see how it reads:

“Tokens Tulips aren’t equity, because they have intrinsic use and because they are non-dilutive to the company’s capitalization table. A token tulip sale is more similar to a Kickstarter sale of paid API keys beanie babies than equity crowdfunding.”

– Broc Romanek