Securities Lawyers for Massachusetts

Holding your money is not, by itself, a securities law violation. The securities laws regulate how the company offered and sold the stock. A company that takes an investor's money before delivering offering documents or confirming accredited investor status has put its private placement exemption at risk. If no exemption applied, Section 12(a)(1) of the Securities Act gives the buyer a right to rescind, but that claim must be brought within one year of the violation and I think it has expired. If the company knew about the SEC investigation when it asked you for capital and did not tell you, you may also have a fraud claim under Rule 10b-5 and the Florida Securities and Investor Protection Act (Chapter 517). Those claims generally must be filed within two years after you discovered the facts and no later than five years after the violation. You learned of the investigation more than two years ago, so timing is a serious obstacle there too. Your stronger claim is probably a state-law claim that no agreement was ever completed and the company therefore has no basis to keep your funds (unjust enrichment or money had and received). Expect the company to argue the opposite, that you agreed on price orally, paid, and became a shareholder. An agreement to buy stock does not have to be in writing to be enforceable, so the missing subscription agreement helps you but does not decide the question. The equity entry in the public filings suggests the company treats your payment as a completed or pending stock purchase. If that is right, the company owes you shares. If it is wrong, it owes you a refund. It cannot keep the money and give you nothing. Florida generally allows four years for unjust enrichment and oral contract claims, and the period may run from the date of your wire. On your timeline, at least two years and eight months have passed, and the law of the company's home state may also apply. I would gather the wire confirmation, every email and text with the company and its attorney, and the page of the filing showing the entry, and I would ask the company's transfer agent whether shares were issued in your name. I would not sign the subscription agreement or investor packet now without advice. A securities attorney should review the documents and send a written demand soon. This is general information based on the facts in your question and is not legal advice.

Good question! Typically, a stock split will result in an appropriate adjustment to an option award so that, after the adjustment, the option holder (you, in this case) is "made whole" -- that is, you are effectively in the same place economically (as far as this option is concerned) after the split with the option as you were before. If you look at your company's Stock Plan (the plan under which your options were authorized and granted to you), you will probably find a section called "Changes in Capitalization." (Or, you can search to document for the word "split" and may be able to find the governing provision that way.) The provision might be included in your Stock Option Agreement, but typically it is covered in the Plan. Anyway, the provision (wherever it is located in your documents) would normally say something along the lines of the following: "In the event of a stock split (and other events), the following will occur: (i) the numbers and class of shares covered by your option award, (ii) the exercise price per share of each outstanding option, and (iii) any applicable repurchase price per share issued under any option award, will be automatically proportionately adjusted in the event of a stock split (or other event)." (Usually the language is even more "legalesey" but that's pretty much the jist of it.) Of course, its impossible to say for sure in your situation (or in any other specific situation) without seeing the relevant documents and knowing all other relevant details, but that would be the typical approach.

Raising funds through an ICO is legally possible —but only if you navigate securities laws, money‐transmission rules and (often) state “blue‐sky” requirements. Below is a roadmap to the U.S. legal framework you must consider; I’ve included statute citations and SEC guidance where relevant. 1. Determine Whether Your Token Is a “Security” Key Point: If your token meets the definition of an “investment contract” under U.S. law, it’s a security. Selling a security to U.S. investors without registration (or a valid exemption) violates the Securities Act of 1933 and the Securities Exchange Act of 1934. Conduct a “Howey analysis” for your token. Retain counsel to document why—factually and legally—you believe it’s not a security (if that’s your position). But be prepared that the SEC will likely view it as a security offering. 2. If It’s a Security, Register or Find an Exemption Choose the exemption that best fits (e.g., 506(c) if you have only accredited investors and want to market openly). File Form D for Reg D, or engage an SEC-registered crowdfunding portal for Reg CF, or go through Form 1-A for Reg A+. Each has different reporting burdens and limitations. 3. State (“Blue‐Sky”) Securities Laws Even if you rely on a federal exemption like Reg D Rule 506, most states impose their own registration or notice filings. For each state where you permit a sale, either file the required Form U-2 (for 506 offerings) or register/claim exemption. Most startups rely on the uniform notice procedure under 506 to simplify compliance. 4. Anti-Money Laundering (AML) / Know-Your-Customer (KYC) Rules Even if you structure your ICO as a non-security (which is rare), you must still comply with anti-money-laundering laws if your token is considered a “virtual currency” under FinCEN’s rules. If you accept USD (or other fiat) in exchange for tokens, register as an MSB with FinCEN, build out an AML compliance program, obtain state money-transmitter licenses where required (e.g., New York BitLicense), and integrate a robust KYC/AML vendor at token sale. I have been heavily involved in this space since 2017 - feel free to reach out John@BenemeritoLaw.com

So to answer your question, yes, certain companies can be exempt from filing SEC reports if they meet specific criteria. This area of securities law is nuanced and can significantly impact a company's regulatory obligations and costs. Let me outline some key points for you: 1. **Small Reporting Company (SRC) Status:** - Companies with public float less than $250 million or annual revenues less than $100 million may qualify for scaled disclosure requirements. 2. **Emerging Growth Company (EGC) Status:** - Available for companies with less than $1.07 billion in annual gross revenues. - Provides certain disclosure and regulatory relief for up to five years after IPO. 3. **Private Company Exemptions:** - Companies with fewer than 2,000 shareholders of record (or 500 non-accredited investors) may be exempt from registration. 4. **Foreign Private Issuer Exemptions:** - Non-U.S. companies may have different reporting requirements. 5. **Rule 12h-3 Suspension:** - Allows suspension of reporting under certain conditions, like having fewer than 300 shareholders of record. While these exemptions can provide relief from full SEC reporting requirements, determining eligibility and maintaining compliance can be complex. Factors such as company size, structure, shareholder composition, and future growth plans all play crucial roles in this determination. It's important to note that even if exempt from full reporting, companies may still have obligations under state securities laws or to their shareholders. Additionally, the benefits of exemption should be weighed against potential drawbacks, such as reduced access to capital markets or decreased investor confidence. Given the complexities and potential consequences of misapplying these exemptions, it would be prudent to conduct a thorough analysis of your specific situation. Would you like to discuss your company's particulars to determine which exemptions, if any, might apply and how to strategically approach your SEC reporting obligations?

Generally, if you are "advising others regarding investment decisions for compensation" you are regulated by the SEC as an investment advisor and subject to oversight and registration with the SEC. There are exemptions, for example, a "Family Office" is not required to register. However, all investors and owners in a Family Office must be actual family and friends would be excluded.