Compliance Lessons from Facebook’s IPO Debacle

Published by Reuters Complinet

June 2012

It is too early to know whether there was any wrongdoing during preparations for the much-hyped Facebook IPO in May, despite the public outcry. It will be months, and more likely years, before the investigations are over, the lawsuits resolved, and investor angst over whether to still “like” Facebook as an investment are settled. Even so, there is valuable guidance for compliance officers in the events that have taken place so far.

“What is clear is that the Facebook IPO was a complete debacle, with fingers being pointed at the underwriters, NASDAQ and the company itself,” Donna Boehme, principal of Compliance Strategists, a consulting firm in New Providence, NJ, wrote in an email. “What is not yet clear is whether there were any actual violations of securities law. Until all the facts come out, we don’t know whether this is a compliance matter, or whether this is a matter of unintended consequences under existing rules, amplified by technical and PR blunders,” she said. Continue reading “Compliance Lessons from Facebook’s IPO Debacle”

Movin’ on Down: Firms Eye Alternative Listings

Published by Reuters Complinet
June 2009

General Motors did it. Air France expected to save $10 million by doing it. Many smaller firms have done it, too, citing cost savings averaging around $500,000 annually.

Since passage of the Sarbanes-Oxley Act in 2002, a number of companies have chosen to “de-register” and move their stocks to foreign or over-the-counter exchanges. While that number has tailed off over the past couple of years, a new rule scheduled to go into effect in December has companies increasing exploring options beyond SEC registration and the major U.S. trading exchanges.

Public companies with annual revenues of $75 million or more whose fiscal years end after Dec. 15 must become fully SOX-compliant. The deadline was pushed back from last year, but there have been no indications so far that there will not be another extension. The deadline is forcing a large number of firms to explore alternatives, experts say.

“When you amalgamate these costs – Sarbanes, litigation, D&O (directors and officers) insurance – you have to be a fairly sizable company from a market cap perspective to bear those costs,” notes Thomas C. Klein, an attorney with the Silicon Valley-based law firm GreenbergTraurig, where he represents public companies and specializes in venture capital deals, mergers and acquisitions and other transactions.

There have been a lot of recent conversations about alternatives to SEC registration with GreenbergTraurig clients, Klein said. “We’re reaching down into the 90 percent of the companies that are listed and applying the SOX 404 to them, and there’s a cost concern for those that are already public. As for those that are not yet public, every one of them now considers … listing on another exchange.” Continue reading “Movin’ on Down: Firms Eye Alternative Listings”

One-man nano investment bank plays matchmaker to firms, funders

Published in Small Business

March 2003

Here’s one more sign the nanotech industry is getting closer to maturity: A former Wall Street analyst is creating what he calls the first investment bank focused solely on the nano business.

NanoTech Financing Solutions LLC was formed late last year by R. Douglas Moffat, who wants to help startups with promising technologies navigate the treacherous waters of corporate finance. It’s a one-man firm right now, but eventually Moffat wants to branch out and launch a venture capital fund to invest in nanotech companies.

One of the most difficult challenges for any emerging technology is to bridge the gap between its beginnings in a research lab and creation of a company prepared to bring commercially viable products to market. Along the way, the company’s financial backing must evolve through several stages. Continue reading “One-man nano investment bank plays matchmaker to firms, funders”