Bringing the Individual Accredited Investor Definition Into the 21st Century

On December 17, 2014, the SEC’s Advisory Committee on Small and Emerging Companies (the “Committee”) held its first meeting in over a year. The transcript and an archive of the webcast of the meeting are not yet available, but will be posted on the SEC’s website in the near future.

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Crowdfunding 2.0?

On October 24, 2013, the Securities Exchange Commission (the “SEC”) published proposed rules (Release Nos. 33-9470; 34-70741) to permit companies to offer and sell securities through “regulation” crowdfunding as proposed in the Jumpstart Our Business Startups Act (the “JOBS Act”), which we have written about here. The 90-day comment period on the proposed rules ended January 23, 2014 but comments are still being submitted to the SEC’s website, with the latest comment submitted on June 3, 2014. There is no indication as to when the SEC will publish its final rules relating to crowdfunding.

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Mobile Medical App Regulations on the Move – Proposed Bills To Further Alter the Regulatory Landscape of Mobile Medical Applications

Apple’s apps store lists close to a 100,000 health apps.  Together with wearable technology, direct-to-consumer testing services, and greater consumer participation in the decision to purchase health insurance, the healthcare market in the United States is undergoing a significant transformation.  Whether and how to regulate this evolving market is subject to substantial discussion and debate.

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Applying a Legal Bandaid to Defective Acts: Delaware Law Creates New Procedures to Ratify Defective Corporate Acts

On June 30, 2013, the State of Delaware amended the Delaware General Corporations Law (the “DGCL”) to include two new sections, Section 204 and Section 205 (together, the “Ratification Provisions”). Set to take effect on April 1, 2014, the Ratification Provisions provide Delaware companies with two alternative processes to remedy defective corporate acts that may have previously been deemed void or voidable: by the company itself (under Section 204) or by the Delaware Court of Chancery (under Section 205). Upon the ratification or the validation by either the company or the court, the defective corporate act will be deemed retroactively effective and valid as of the time the defective corporate act was taken.

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SEC Announces 2014 Examination Priorities for Investment Advisers

On January 9, 2014, the Securities and Exchange Commission released its examination priorities for 2014 (the “2014 Exam Priorities Release”), covering a wide range of issues at financial institutions, including investment advisers and investment companies, hedge funds and private equity funds.  The 2014 Exam Priorities Release highlights a number of areas and key risks that the SEC will be monitoring and examining in 2014.  The SEC has identified the following core risk areas for investment advisers:

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California Court of Appeal Makes It Easier to Add Business Owners to a Judgment

Individuals form limited partnerships, limited liability companies and corporations to limit their personal liability.  These legal structures encourage entrepreneurs to take risks.  The California Court of Appeal, Second Appellate District, however, has made it easier to add a business owner to a judgment that initially was entered only against the corporate or limited partnership entity he or she owns.  In Relentless Air Racing LLC v. Airborne Turbine Ltd Partnership (Dec. 31, 2013) 2d Civil No. B244612, the Second Appellate District reversed the trial court’s finding that the business owner could not be added to the judgment under an “alter ego” theory.  The Court of Appeal required the limited partners, as well as current and former general partner entities to be added to the judgment against the limited partnership.

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Setting The Record Straight On The New General Solicitation Rules

On September 23, 2013, the final rules eliminating the prohibition on general solicitation and advertising for certain offerings under Rule 506 went into effect.  While this development was anticipated with much excitement by the angel and venture capital communities, the final rules have created some uncertainty.  In this blog post, we address some of the speculations about how to do private placements in this new day and age that are floating around the angel and venture capital communities.

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Crowdfunding Moves Forward: The SEC Issues Proposed Rules on Crowdfunding

On October 24, 2013, in accordance with Title III of the Jumpstart Our Business Startups Act (the “JOBS Act”), the Securities and Exchange Commission (the “SEC”) issued a press release and published long-awaited proposed rules (Release Nos. 33-9470; 34-70741) (the “Proposed Rules”) to permit companies to offer and sell securities through crowdfunding (“Regulation Crowdfunding”).

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California Tax Relief for Sellers of Qualified Small Business Stock

On Friday October 3, 2013, Governor Brown signed into law AB 1412, which provides full relief for individuals affected by the decision in Cutler v. Franchise Tax Board, where the California Court of Appeal held that the California tax incentives relating to the sale of qualified small business stock discriminated against interstate commerce and were therefore unconstitutional.

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The FDA Releases Long-Awaited Final Guidance on Mobile Medical Applications

On September 23, 2013, the U.S. Food and Drug Administration (the “FDA” or the “Agency”) issued long-awaited final guidance for developers of mobile medical or health applications (or “mobile medical apps”) used on smartphones and other mobile devices. The final guidance reflects a tailored approach by the Agency to analyzing mobile medical apps, and represents an important step in narrowing the field of interpretation of the current laws.

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