Securities Transactions and Compliance

Carlton Fields offers a full service securities law practice that covers a broad spectrum of legal services. We help clients satisfy the numerous legal requirements that arise in securities transactions, including private or public offerings and mergers and acquisitions; ongoing compliance with applicable disclosure and reporting obligations; corporate governance matters; and securities litigation. Our integrated approach draws on the collective experience of our securities lawyers working with other business, regulatory, and litigation attorneys to achieve our clients’ objectives.

Our attorneys, who include former SEC officials, have extensive knowledge of the federal securities laws, SEC regulations, blue sky laws, and stock exchange and FINRA rules. They stay current on the fast moving and evolving securities laws and regulations. Our services include keeping our clients apprised of these developments and counseling them on the effect these laws and regulations may have on transactions and ongoing compliance programs.

We also provide our clients with dispute and litigation support, including the defense of securities law-based class action, and shareholder derivative suits based on a variety of corporate governance and alleged fiduciary duty failures. In addition, our lawyers have guided and represented companies with internal investigations and the negotiation of SEC inquiries and investigations.

Private Placements and Private Investments
Our attorneys regularly advise venture capital firms, private equity firms, and companies regarding various stages of investment financing and exit strategies.

Issuer Offerings. We represent both issuers and placements agents in connection with private direct capital raising activities on behalf of both private and public entities. These activities range from a basic offering of common equity (including stock, limited liability company interests, and limited partnership interests) or debt instruments, to the more complex offerings of preferred equity and convertible debt securities. Because of our significant experience in private offerings, we are able to help our clients analyze the appropriate structure for the transaction, determining the exemption from registration to utilize, and planning for a future liquidity event. We assist in all aspects of these transactions including, determining the nature of the investor and counseling on the appropriate type of investor for the offering; assisting in preparing the private placement memorandum, the subscription agreement or securities purchase agreement, and the placement agreement; and compliance with all federal and state securities law filings.

Venture Capital/Private Equity. In addition to direct private offerings, we also represent both issuers and investors in venture capital and private equity investment transactions. These transactions typically include a single strategic or financial investor or small group of investors in a negotiated investment in an issuer. In many cases, outside institutional loans are simultaneously negotiated in tandem with the investment. Our lawyers counsel on structure, exit strategies, and protective governance provisions, and help negotiate and draft all necessary agreements and documentation. Depending on the transaction, these documents may include a securities purchase agreement, an investment agreement (relating to rights of first refusal, voting agreements, co-sale and drag along rights, etc.), preferred stock designations or limited liability company operating agreements, and various debt instruments. In addition, as part of our services in connection with these transactions, we often assist in due diligence reviews, preparation of employee equity incentive plans, and structuring of corporate governance processes.

Rule 144A Offerings. We also represent issuers and placement agents in so-called Rule 144A offerings (which are often a stepping stone to an initial public offering)  of unregistered securities that are not listed on an exchange or quoted on an inter-dealer quotation system to qualified institutional buyers. In connection with these transactions, we assist with the initial placement of newly issued securities to an initial purchaser in a private placement transaction and the subsequent offer and resale of the restricted securities immediately to qualified institutional buyers.

Our attorneys help prepare the purchase agreement with the initial purchaser, the offering memorandum for the resale of the offered securities, the final term sheet, and the documentation necessary to complete these transactions, including the subscription agreements and questionnaires to verify the status of the resale purchaser as a qualified institutional buyer under SEC rules. Before undertaking such offerings, we often assist with due diligence reviews and make any changes to issuer’s corporate governance necessary to position it for the eventual offer and sale of its securities to sophisticated third party investors.

PIPE Transactions. We also represent issuers and private investors in private investment in public equity transactions, so-called PIPE transactions, involving the offer and sale of equity securities by companies that are already publicly traded. These transactions, which involve a private placement of securities to be followed by a public offering of the same securities by the private investor purchaser, require detailed planning and structuring in order to comply with all applicable securities laws and stock exchange rules. Our attorneys work closely with clients to satisfy these requirements and assist with purchase agreements by and between the private investor and the publicly traded company, verifying compliance with the applicable private placement exemption from registration and, if a placement agent is involved, negotiating the placement agreement. Following the closing of the private placement transaction, we help prepare and file the registration statement with the SEC pursuant to which the privately placed securities will be resold by the private investors pursuant to a public offering.

Public Offerings
We represent both issuers and underwriters in the public offer and sale of common and preferred stock, secured and unsecured debt instruments, limited partnership interests, mutual fund shares, variable life insurance and annuities, and other investments. Our lawyers have extensive experience with initial public offerings and subsequent primary offerings by issuers, shelf registrations, and resale offerings by selling securities holders. Our lawyers, who have extensive knowledge of the federal securities laws, SEC regulations, blue sky laws, and stock exchange and FINRA rules, help prepare companies for the rigors of becoming publicly traded. These include compliance with the Sarbanes-Oxley Act, SEC rules and regulations, and the listing requirements of the stock exchange on which they may seek to list their securities.

We work with clients to identify the most appropriate filing status for the issuer—smaller reporting company, emerging growth company, investment company, or large issuer—and then help develop the proper offering strategy and offering documents. We handle public offerings from the initial planning stages and negotiations through the closing of the offering, as well as any post-offering filings. Our attorneys, who include former SEC officials who held policy level positions with the Division of Corporation Finance and the Division of Investment Management of the SEC in Washington, D.C., have experience negotiating underwriting arrangements, preparing registration statements and prospectuses, negotiating with SEC staff, complying with applicable state securities laws, and addressing the various SEC regulations affecting the issuance and offering of securities.

Stock Exchange Listings and Alternative Quotation of Securities
Related to our representation of companies with securities registered under the federal securities law, we also help clients that are seeking quotation on the various stock exchanges.  We help prepare and file listing applications on all of the major and regional stock exchanges.   As part of these services, we work with our clients to evaluate the specific listing requirements of the stock exchange on which they seek to list their securities; provide advice and guidance on the steps needed to satisfy the requirements, including compliance with any mandated corporate governance standards; and provide or prepare the documentation required as part of the listing process.

For those companies that do not yet meet the standards for listing on a stock exchange but are interested in seeking a quotation system for their securities, we provide counsel and guidance on the availability of listing alternatives, including quotation on the OTC Bulletin Board or the Pink Sheets. We help clients that are interested in pursuing an alternative quotation of their securities to satisfy the relevant quotation requirements. These include providing the public information disclosures necessary for a FINRA registered broker-dealer to trade in the securities.

Public Company Compliance
We assist publicly traded clients and those with securities registered with the SEC with their continuous reporting obligations under the Securities Exchange Act of 1934. These include:

  • the preparation and review of their annual filings on Form 10-K, quarterly filings on Form 10-Q, and periodic reports on Form 8-K (both required and voluntary)
  • the preparation, review, and filing of proxy, consent, and information statements relating to annual and special meetings of securities holders
  • compliance with the reporting obligations of their officers, directors, and certain significant stockholders, on Forms 3, 4, and 5 and Schedules 13D and 13G

Additionally, we keep abreast of the constantly evolving disclosure requirements of the SEC and the stock exchanges imposed under the applicable rules and regulations. We continually provide our clients with reviews, analyses, and explanations of recent changes, developments, and trends. We also help them respond to shareholder proposals for inclusion in a company’s proxy statement for its annual meeting, and keep current on the positions being taken by proxy advisory firms, including Institutional Shareholder Services and Glass, Lewis & Co.

Corporate Governance
We advise clients on the corporate governance and corporate law requirements necessary to effect specific actions they wish to take. In this regard, we have worked with clients to prepare appropriate:

  • corporate governance guidelines and procedures that are designed not only to satisfy good corporate practices, but to also comply with the Sarbanes-Oxley Act and the rules and regulations of the SEC and the stock exchanges, including the charters for the audit, compensation, and corporate governance committees
  • codes of conduct and ethics, whistleblower policies, and shareholder communication procedures
  • policies designed to satisfy our clients’ various obligations under the federal securities laws, including, insider trading policies, Section 16 compliance programs, Regulation FD policies, Rule 144 compliance procedures, and investment company and investment adviser compliance programs

Employee and Director Plans and Indemnification Agreements
We routinely help clients prepare employee and directors stock option and related plans that involve derivative securities and the need to seek and obtain the necessary board and stockholder approvals to implement them. These plans include traditional stock options (incentive and non-qualified), stock appreciation rights, restricted stock units, restricted and unrestricted stock grants, performance based awards, and other incentive compensation based derivative securities. To the extent our clients are publicly traded companies, we help them register with the SEC the underlying securities to be issued under such plans and, when applicable, register the plan itself. We also assist with, and negotiate, employment agreements with senior management and indemnification agreements with management and directors.

Mergers and Acquisitions and Other Extraordinary Corporate Transactions
We represent businesses in all aspects of mergers and acquisitions transactions, exchange offers, tender offers, takeovers, and sales of stocks and assets. Our lawyers have experience advising and representing clients in merger and acquisition transactions involving both public and privately held firms in a wide range of transactions, including advising boards of directors on fiduciary duty issues. Our services include helping clients negotiate the merger or acquisition agreement, preparing the proxy statement or other solicitation materials to seek any necessary shareholder approvals of the transaction and, as needed, filing these materials with the SEC.

Our attorneys also advise and counsel clients on the available structuring alternatives for the proposed transactions, including the use of tender offers, agreements with significant shareholders, and other devices to ensure an efficient transaction completion process. If the transaction involves the issuance of securities as part of the acquisition, we also help satisfy any securities law aspects of the transaction, including the registration of the securities with the SEC or, if applicable, compliance with a private placement exemption from registration of the securities.

Consistent with our mergers and acquisition services, we also regularly advise clients in contests for corporate control and regarding structuring stockholder protective devices to guard against unsolicited coercive hostile takeover attempts. Further, we represent clients in other extraordinary transactions. These include stockholder dividend reinvestment plans; stock splits or dividends; recapitalizations; stock repurchase plans and issuer tender offers; going-private transactions, including those subject to Exchange Act Rule 13e-3; and management buyouts.

Hedge Funds and Other Private Investment Companies
We counsel hedge fund managers and other sponsors of private investment companies on a full range of matters regarding the formation and operation of their private fund offerings. We advise on matters such as compliance with federal and state securities laws and regulations, investment adviser regulation, broker-dealer status, securities and adviser registration exemptions, the review and preparation of partnership agreements, subscription agreements, and fund offering documents, and SEC reporting and compliance requirements.

Investment Advisers/Broker Dealers
Our attorneys are experienced with the formation of financial services entities including broker-dealers and investment advisers. We guide clients through every phase of the formation and regulatory approval process.

We also provide a full-service, regulatory and compliance counseling practice regarding:

  • supervision and supervisory procedures
  • books and recordkeeping
  • Central Registration Depository reporting
  • cash and non-cash compensation rules
  • correspondence and e-business issues
  • privacy rules
  • Office of Foreign Assets Control and AML compliance and regulation
  • currency transaction reporting requirements
  • order handling
  • marketing
  • sales
  • advertising and marketing materials
  • suitability
  • trading rules
  • hot-issue rules
  • net capital
  • customer reserve requirements
  • fidelity bonds

Our services to the securities industry also involve a broad range of matters arising from the Dodd-Frank Wall Street Reform and Consumer Protection Act. These include the SEC’s whistleblower procedures; the harmonization of the regulation of broker-dealers and investment advisers, the Volcker Rule; the regulatory scheme for swaps and security-based swaps; and the regulation of systemically risky, non-bank financial companies and executive compensation matters.

Litigation and Dispute Resolution
Our securities law litigators handle disputes regarding securities and corporate governance issues throughout the country, with responsibilities that range from responding to regulatory inquiries and pre-complaint investigations to litigating claims of securities fraud. We routinely defend underwriters, financial advisors, and corporations, including their officers and directors, against class action litigation, shareholder derivative actions, suits arising out of failed securities offerings and other complex matters involving the Securities Act, proxy suits, appraisal actions, the Exchange Act, and the Investment Company Act of 1940.

We guide and represent corporate defendants, investment advisers, broker-dealers and other market professionals through internal investigations, inquiries, and proceedings initiated by the SEC and FINRA. Our firm handles all phases of SEC inquiries and investigations, including responding to Wells notices; and defending against enforcement actions relating to market manipulation, insider trading, and claims of financial fraud.

We routinely represent registered broker-dealers and other professionals in regulatory proceedings and arbitrations involving FINRA, and do so in a way that limits our clients’ financial, reputational, and licensing exposure.

Specialized Industries
Our lawyers are knowledgeable regarding various industries and types of offerings that require a high level of experience to ensure efficient counsel.

Securities Industry. Our firm provides ongoing regulatory, compliance, and transactional legal services relating to all aspects of the securities industry. We represent various securities industry participants, including broker-dealers, investment advisers, mutual funds and their sponsors, investment companies, service providers, and financial services companies. We also serve the regulatory, enforcement, and litigation needs of the securities industry. Our attorneys have experience with diverse, cutting edge issues that arise from sales and distribution, compliance, and securities litigation. Our integrated approach draws on the collective experience of our business, regulatory, and litigation attorneys.

Insurance Companies. We represent insurance companies before various state regulators and the SEC. We work with our insurance company clients and actuaries to prepare for and conduct mutual fund offerings, variable life insurance and variable annuity products, market-value-adjustment products, indexed products, synthetic annuities, and other innovative products. We provide general capital raising and corporate services to insurance companies. We also represent insurance companies on a full range of legal and regulatory matters regarding the structuring and offering of variable annuity contracts, variable life insurance policies, indexed annuities, contingent deferred annuities, and private placement variable insurance products for bank—and corporate—owned life insurance and individual high net worth markets. We also advise hedge funds and other private investment funds that desire to offer their funds through private placement variable insurance products as underlying investment options.

Community Banks and Financial Institutions. We represent banking and financial institutions in many complex transactions that require high-level skills in areas including banking law, corporate law, federal and state securities laws, and tax law. Our attorneys represent banks and financial institutions before all of the federal banking regulators, including the FDIC, OCC, the Federal Reserve Board, and, in the case of public company clients, the SEC. We also represent these clients before state banking regulators, including those in Georgia and Florida.

Our lawyers advise banks, bank holding companies, and financial institutions in securities transactions, mergers and acquisitions, corporate governance matters, corporate financing, and compliance with the rules and regulations of the SEC, various banking regulators, the Internal Revenue Service, and state tax regulators. We represent banks and bank holding companies in both public and private sales of common and preferred stock, debt offerings (secured and unsecured), and other capital raising activities. Our firm also regularly represents its financial service clients in all forms of mergers and acquisitions, including mergers for cash and securities, exchange offers, tender offers, and sales of stocks and assets.

REITS. Our attorneys advise public and private REITs nationally on all REIT-related matters, including REIT formation and the purchase and sale of REIT entities. Our experience includes working with both equity and mortgage REITs. We have represented REITs, other real estate entities, and other capital markets participants in both public and private offerings of debt and equity securities. Each involved specialized disclosure requirements, compliance with specific tax laws and regulations, and Investment Company Act issues. Our REIT team consists of lawyers who served with the SEC in the real estate branch. There, they reviewed registration statements, proxy statements and periodic reports filed by REITs, real estate limited partnerships, and other real estate financing vehicles.