Newsletter
May 13, 2013
Securities Source: A Quarterly Newsletter Devoted to Securities Law and Regulation Updates
The SEC Speaks: Are You Listening?
Points of Emphasis During the 2013 Proxy Season
SEC Commissioner Luis A. Aguilar recently issued a statement in support of SEC corporate governance rules and elaborated on his views about disclosure topics that he believed should be a point of emphasis in 2013.
Erosion of SEC Independence and Authority
SEC Commissioner Daniel Gallagher expressed significant concerns about the approximately 100 specific mandates under the Dodd-Frank Act that require SEC rulemaking.
Securities Litigation
Two Recent Supreme Court Cases Offer Good and Bad News for Securities Defendants
The United States Supreme Court issued two recent opinions that offer both good and bad news to defendants in securities fraud lawsuits. Although both cases dealt with primarily procedural issues, the resolution of those issues has an important and substantive impact on the potential exposure of defendants to claims and the costs of dealing with those claims.
Securities Law Tracker
Monitor Report: Key Changes to SEC Laws
Social Media Approved as Regulation FD Compliant Disclosure
The SEC released guidance relating to the use of social media sites to disclose material non-public information in compliance with Regulation FD of the Securities Exchange Act of 1934.
Much Ado About Crowdfunding
Although the SEC missed its rulemaking deadline months ago, legal crowdfunding, or the use of the internet and social media to raise capital, typically from a large number of people and in relatively small amounts, has remained a hot topic.
SEC and DOJ Provided guidance on FCPA
The SEC and the DOJ provided guidance as to the application of and compliance with
the FCPA with a Resource Guide to the US Foreign Corrupt Practices Act.
SEC Adopts Rules Requiring Payment Disclosures by Resource Extraction Issuers
The Securities Exchange Commission ("SEC") adopted Section 13q-1 of the Securities Exchange Act of 1934 ("Exchange Act") as mandated by Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd Frank Act").
The SEC Speaks: Are You Listening?
Points of Emphasis During the 2013 Proxy Season
By: Michael Dunn
SEC Commissioner Luis A. Aguilar recently issued a statement in support of SEC corporate governance rules and elaborated on his views about disclosure topics that he believed should be a point of emphasis in 2013. Commission Aguilar noted that SEC rulemaking in recent years focused on disclosures about compensation policies, the qualifications of board members, the board's leadership structure and role in risk oversight, and board diversity policies.
However, Commission Aguilar believes that many public companies "continue to fall short of providing the robust, clear, and useful disclosure required by law. Some companies appear to view our proxy and other disclosure requirements as a box to be checked, or an obstacle to be overcome, rather than an opportunity to engage and inform their shareholders."
Commission Aguilar believes that the compensation risk disclosure required by 2009 amendments to Item 402(s) of Regulation S-K is one such area in need of improvement. "Although, by its terms, this rule requires such disclosure only 'to the extent' that risks arising from the issuer's compensation policies and practices are 'reasonably likely to have a material adverse effect,' it would be prudent and appropriate for all issuers to discuss the role of compensation in risk management in their proxy statements."
The SEC has yet to propose disclosure rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") regarding pay-for-performance and CEO-to-employee pay ratios. Commission Aguilar suggests that this information is inherently relevant to an understanding of compensation policies and companies "should also consider including enhanced disclosure in the proxy statement regarding the relationship between executive compensation actually paid and a company's long-term performance."
Commission Aguilar also identifies board leadership structure disclosure as largely deficient in proxies. "Many issuers provide only minimal discussion in response to the board leadership question. If the same person serves as both principal executive officer and chairman of the board, the reason given is often simply 'efficiency,' 'streamlined decision-making,' or 'depth of knowledge.' If the CEO and chairman positions are separated, the proxy statement might say something to the effect that separating the two positions permits the CEO to concentrate on 'day-to-day business,' while allowing the chairman to lead the board in providing 'independent oversight.' Although Item 407(h) specifically requires the disclosure to indicate why the registrant has determined that its leadership structure is appropriate 'given the specific characteristics or circumstances of the registrant,' such analysis is
often missing."
Although not specifically covered by any current disclosure rules, Commissioner Aguilar also notes that "investors have also been clamoring for information on how corporations use corporate resources for political purposes." A recent rulemaking petition filed with the SEC by a coalition of law professors requests the SEC to adopt rules requiring public disclosure of political contributions. Commissioner Aguilar observed that this petition has received "an unprecedented display of support" with over 380,000 letters of having been submitted to the SEC.
As companies and their disclosure committees continue to react and respond to SEC staff comments on existing disclosure rules, they should begin to consider whether and how they would comply with disclosure rules regarding political contributions.
Erosion of SEC Independence
and Authority
By: Michael Dunn
At a recent "SEC Speaks" event, SEC Commissioner Daniel Gallagher expressed significant concerns about the approximately 100 specific mandates under the Dodd-Frank Act that require SEC rulemaking. Commissioner Gallagher noted that with the '33 and '34 Acts, Congress had "established the SEC as an expert, independent agency with the authority to administer the federal securities laws", and that Congress historically "has avoided imposing minutely detailed mandates on the [SEC]… For nearly eighty years, the [SEC], like other independent agencies, has brought its expertise and judgment to bear in fulfilling the legislative mandates established by Congress in the federal securities laws."
Commissioner Gallagher observed that many of the SEC mandates under the Dodd-Frank Act "are highly prescriptive, and instead of directing the [SEC] to regulate in an area after studying the relevant issues, compiling data, and determining what, if any, regulatory action may be appropriate, they require the [SEC] to issue strictly prescribed and often highly technical rules under short deadlines."
SEC rulemaking has historically been a slow and deliberative process by the SEC and its staff who will research a topic, issue, solicit and consider public comments to proposed rules and questions, and after the consideration of those public comments adopt final rules with an implementation timeline that takes into account a cost benefit analysis. This rulemaking process is in conflict with the mandates and rulemaking timelines required by the Dodd-Frank Act and the more recent Jumpstart Our Business Startups Act (the "JOBS Act"). Moreover, SEC commissioners and high ranking members of the Division of Corporation Finance at the SEC had issued public statements in opposition to various provisions of the Dodd-Frank Act and the JOBS Act prior to their adoption. It is no surprise then, that the SEC has largely ignored the rulemaking timelines proscribed by the Dodd-Frank Act and the JOBS Act in deference to its historical rulemaking processes.
The specific SEC mandates under the Dodd-Frank Act and the JOBS Act demonstrate a theoretical erosion of the regulatory independence of the SEC. With the establishment of the Financial Stability Oversight Council (the "FSOC") pursuant to Title I of the Dodd-Frank Act, Commission Gallagher observes that "the threats to the [SEC's] independence move from the theoretical to the immediate."
The FSOC is a regulatory panel consisting of ten members, including the heads of nine federal agencies, including the SEC, CFTC, FDIC and the Treasury Department. Commissioner Gallagher notes that the FSOC "is composed not of agencies, but the individual heads of agencies, acting ex officio." Commissioner Gallagher argues that "already in its short existence, this new body has directly challenged the [SEC's] regulatory independence. It is also where just one member of the SEC, the Chairman, can defend that independence…. As I have said in the past, the structure of FSOC is particularly troubling for an independent agency like the SEC. While the Secretary of the Treasury and the heads of the FHFA and the CFPB may speak on behalf of their agencies — not to mention the President that appointed them — the same cannot be said of the Chairman of the SEC. To preserve its independence, Congress created the SEC as a bipartisan, five-member Commission and gave each Commissioner — including the Chairman — only one vote. This means that the Chairman has no statutory authority to represent or bind the Commission through his or her participation on FSOC. Yet as a voting member of FSOC, the Chairman of the SEC does have a say in authorizing FSOC to take certain actions that may affect."
As the SEC and its staff continue the deliberative rulemaking process without regard to the timelines mandated by the Dodd-Frank Act, it will be interesting to see whether Congress takes further action and how the SEC reacts to FSOC actions regarding the federal securities laws.
Securities Litigation
Two Recent Supreme Court Cases Offer Good and Bad News for Securities Defendants
By: Ryan Malloy and William Prickett
The United States Supreme Court issued two recent opinions that offer both good and bad news to defendants in securities fraud lawsuits. Although both cases dealt with primarily procedural issues, the resolution of those issues has an important and substantive impact on the potential exposure of defendants to claims and the costs of dealing with those claims.
Gabelli v. Securities Exchange Commission
In Gabelli v. Securities Exchange Commission (No. 11–1274, February 27, 2013), the Supreme Court ruled that the U.S. Securities and Exchange Commission must file enforcement actions within five years of an alleged fraud, and is not entitled to the same right to a "discovery tolling" of the statute of limitations as private citizens. In the lower court, the SEC alleged that certain late trading by defendants adversely affected long-term fund investors. According to the complaint, the defendants' late trades took place between 1999 and 2002, more than six years prior to the filing of the action.
The operative statute, 28 U.S.C. Section 2462, requires that the government bring any action for civil penalties within five years of the date its claim "first accrued." The defendants argued that any claim "first accrued" when the alleged fraud took place - in 2002 and before. The SEC argued that the claim did not accrue until the agency discovered the fraud in 2003, and that it therefore filed its complaint within the five year limitations period.
Although the statute contains no discovery rule, the Second Circuit found that it implies one, and held that an SEC fraud claim first accrues when the agency discovers or should have discovered alleged misconduct. Reversing the Second Circuit, the unanimous Supreme Court concluded that the SEC filed its claims too late, and was not entitled to a stay or tolling of the limitations period during the one year between the occurrence of the challenged activity and the "discovery" of it by the SEC.
According to Chief Justice Roberts, allowing the government to bring enforcement actions after the time permitted by the plain language of the statute of limitations "would leave defendants exposed to government enforcement actions not only for five years after their misdeeds, but for an additional uncertain period into the future. Repose would hinge on speculation about what the government knew, when it knew it, and when it should have known it." The Court further noted that, unlike private citizens, the SEC and other government agencies have powerful investigative tools at their disposal, and are commissioned with finding and rooting out fraud when it occurs.
Amgen Inc., et al. v. Connecticut Retirement Plans and Trust Funds
In Amgen Inc., et al. v. Connecticut Retirement Plans and Trust Funds (No.
11–1085, February 27, 2013), the Supreme Court rejected a bid to raise the bar for securities class action cases. It confirmed that securities fraud class actions need only plausibly allege - not prove - that purportedly misleading statements are material in order to win class certification.
Plaintiff sued Amgen under SEC Rule 10b-5, alleging false statements about the safety of the company's anemia treatment products. Plaintiff then moved for class certification by invoking the fraud-on-the-market presumption to establish that the element of reliance was common to the class. Amgen opposed class certification on the grounds that the alleged false statements could not have been material, and that the fraud-on-the-market presumption could not apply, because the truth about the safety of the products at issue had already been disclosed to the market at the time of the transactions. Amgen further argued that individualized issues predominated over common questions because each purported class member would need to prove that he or she relied on the alleged misstatements.
The Supreme Court addressed 1) whether a securities fraud plaintiff alleging fraud on the market must establish materiality of alleged misstatements in order to obtain and class certification; and 2) whether the district court in such a case must allow the defendant to present evidence rebutting the applicability of the fraud-on-the-market theory prior to certification based on that presumption.
The majority first held that establishing the materiality of alleged fraudulent statements cannot be required at the class certification stage. On the second question, the court held that the district court properly declined to consider rebuttal evidence concerning materiality at the class-certification stage. Instead, trial courts will make a determination of whether alleged statements were material at later stages, at summary judgment or trial.
The Supreme Court's ruling in the Amgen case represents an additional challenge for companies and their directors and officers, who, in certain Circuits, will now lose the early opportunity to defeat potential Rule 10b-5 class actions at the class certification stage. But while the decision resolves a marked Circuit split on the issue, it does not alter the substantive law of such claims, including the requirement of materiality. It merely shifts the timing of when materiality is determined to later in the case. Ultimately, a lack of materiality will continue to dispose of a 10b-5 class action on the merits; however, with the decision made at later stages of the proceeding there is a likelihood that greater legal fees will be spent before reaching that point.
Securities Law Tracker
| Date | Authority | Regulation |
Compliance Date |
|---|---|---|---|
| 7/9/12 | U.S. Dist Ct, SDNY | Held that the whistleblower provisions pursuant to the Dodd-Frank Act ("DFA") that protect employees of subsidiaries of public companies (not just direct employees of public companies) apply retroactively. | Retroactive effect |
| 8/22/12 | SEC | Adopted new rules implementing DFA's requirement that companies that directly manufacture products publicly disclose their use of conflict minerals that originated in the Democratic Republic of the Congo or an adjoining country. | Fiscal Year 2013 - Reports due 5/31/14 |
| 8/22/12 | SEC | *Adopted new rules implementing DFA's requirement that resource extraction issuers disclose certain payments made to the U.S. government or foreign governments. | Form must be filed within 120 days of fiscal year ending after 9/30/13 |
| 8/29/12 | SEC | Requested comments on proposed rules eliminating the prohibition against general solicitation and general advertising for offerings under Rule 506 of Regulation D of the Securities Act and Rule 144A of the Securities Act. | Comment period closed |
| 9/5/12 | FINRA | FINRA Rule 5123 requires each FINRA member to file a copy of any private placement memorandum, term sheet or other offering document the firm used within 15 calendar days of the date of the sale with FINRA, or indicate that it did not use any such offering documents. | 12/3/12 |
| 10/11/12 | SEC | Revised EDGAR filing manual to require draft registration statements and amendments and related correspondence must be filed with the SEC via the EDGAR system. | 10/15/12 |
| 10/16/12 | SEC | Issued bulletin regarding who can provide proof of ownership for purposes of submitting a shareholder proposal under Rule 14a-8; the manner in which companies should notify proponents of a failure to provide proof of ownership; and the use of website references in proposals and supporting statements. | -- |
| 11/14/12 | SEC & DOJ | *Released "A Resource Guide to the U.S. Foreign Corrupt Practices Act" which can be found here: http://www.justice.gov/criminal/fraud/fcpa/guide.pdf | -- |
| 1/10/13 | FINRA | *Announced a voluntary "Interim Form for Funding Portals" for prospective crowdfunding portals under the JOBS Act. Those intending to become a funding portal may voluntarily submit information regarding their business to help FINRA develop crowdfunding rules. | Open for submission |
| 1/25/13 | FINRA | Amended Rule 8210 to significantly broaden FINRA's ability to inspect books and records and compel sworn testimony -- applies to member firms, associated persons, attorneys who are representing firms and other persons subject to FINRA's jurisdiction. | 2/25/13 |
| 2/14/13 | FASB | Requested comments on a proposal to improve financial reporting by providing a comprehensive measurement framework for classifying and measuring financial instruments. | Comment period ends 5/15/13 |
| 2/27/13 | SEC | Adopted final rule adjusting the maximum amounts of the civil monetary penalties for the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, and certain penalties under the Sarbanes-Oxley Act of 2002. | 3/15/13 |
| 3/15/13 | SEC | Provided investment companies with guidance on their duty to review their social media website content. | -- |
| 3/20/13 | SEC | Approved a pilot program of the NASDAQ Market Quality Program (MQP), an optional listing program allowing sponsors of Exchange Traded Funds (ETFs) to contribute funds to the exchange that may be used to pay market makers for improving the quality of the market in MQP funds. | 2Q'13 |
| 4/2/13 | SEC | *Issued a report clarifying that companies can use social media outlets like facebook and Twitter to announce key information in compliance with Regulation FD. | -- |
| 4/3/13 | Fed Res | Approved final rule that establishes definitions of "predominantly engaged in financial activities," "significant nonbank financial company" and "significant bank holding company." | 5/6/13 |
Monitor Report: Key Changes to SEC Laws
Social Media Approved as Regulation FD Compliant Disclosure
By: Georgia Quinn
On April 2, 2013 the SEC released guidance relating to the use of social media sites to disclose material non-public information in compliance with Regulation FD of the Securities Exchange Act of 1934, which requires that when an issuer, or a person acting on its behalf, discloses material, nonpublic information to securities market professionals or shareholders where it is reasonably foreseeable that they will trade on the basis of the information, it must distribute that information to the general public.1 In connection with its Report of Investigation of Netflix, Inc. and Reed Hastings, the SEC advised that while compliance with Regulation FD "is always a facts-and-circumstances analysis based on the specific context presented,"2 the use of social media such as facebook and Twitter to disclose material nonpublic information would constitute a method "reasonably designed to provide broad, non-exclusionary distribution of the information to the public,"3 as long as the company provided adequate notice to investors and the general public as to its use of such media. However, if access to the medium or website would require a membership or password, which gave selective access, such medium would not be compliant.
The SEC previously provided guidance in 2008, explaining that for purposes of complying with Regulation FD, a company makes public disclosure when it distributes information "through a recognized channel of distribution."4 The SEC reiterated that it does not intend to reduce the number of channels that are used to disseminate information to the public, but only to ensure that the public is adequately informed as to which channels are being used. Thus, if a company disclosed on its website or public filings that it will use facebook, Twitter or other social media to distribute material nonpublic information and provided clear instructions as to how to access such information, such social media channels would be available to use to comply with Regulation FD.
This guidance was provided in connection with an investigation of Netflix, Inc. and its CEO who posted a message containing information regarding the number of viewed hours of Netflix content for the month of June 2012 on his personal facebook page. Ultimately, the SEC chose not to pursue charges against Mr. Hastings or Netflix.
Much Ado About Crowdfunding
By: Georgia Quinn
Although the SEC missed its rulemaking deadline months ago, legal crowdfunding, or the use of the internet and social media to raise capital, typically from a large number of people and in relatively small amounts, has remained a hot topic. When passed as part of the Jump Start Our Business Startups Act or JOBS Act on April 5, 2012, the exemption from SEC registration for entrepreneurs and businesses using crowdfunding portals or broker-dealers was heralded by President Obama as a "game changer."5 The public response was so overwhelming that it prompted the SEC to release guidance on April 23, 2012, stating that crowdfunding was still illegal and could only be conducted pursuant to regulations which were yet to be promulgated.6 On May 7, 2012, the SEC published further guidance in the Frequently Asked Questions section of its website regarding operating as a funding portal or crowdfunding intermediary.7 Until recently, nothing more had happened with respect to the congressionally mandated regulations, much to the dismay of the entrepreneurial and start-up community.
On January 10, 2013, however, even without SEC proposed regulations in place, FINRA published a voluntary Interim Form for Funding Portals, to allow potential funding portals, the intermediaries between investors and issuers, to provide information to "develop rules that reflect the funding portal community and its business."8 The JOBS Act requires funding portals to be FINRA members. In addition, on March 20, 2013 the American Bar Association Federal Regulation of Securities Committee submitted comments to the SEC regarding crowdfunding.
The ABA outlined 15 points it hoped the SEC would adopt in its regulations. Noteworthy issues addressed were the integration of crowdfunded offerings with other securities offerings in both aggregating the issuance amount and the per investor amount, the offering and investment caps and the thresholds for requiring audited financial statements.9
Even more recently, on March 26, 2013, the SEC granted no-action relief to FundersClub Inc., a so-called "accredited crowdfunding platform," which operates a membership-only web portal limited to accredited investors, and an affiliate, which manages the investment funds formed to invest in start-up companies.10 The no-action letter advised that, subject to certain conditions, the SEC would not recommend enforcement action against the FundersClub entities, which currently appear to be complying with an exemption from broker-dealer registration established by Title II of the JOBS Act. While, FundersClub is using a different exemption, practitioners are drawing parallels to the crowdfunding exemption provided by Title III of the JOBS Act. Thus, despite what the SEC may have hoped for, crowdfunding clearly has momentum and is unlikely to disappear anytime soon.
SEC and DOJ Provide Guidance on FCPA
By: Georgia Quinn
As markets expand and the world becomes smaller, the Foreign Corrupt Practices Act or FCPA has become increasingly relevant to companies. Initially intended to prevent the rampant bribery of foreign officials the SEC discovered in 1977,11 the FCPA now reaches a multitude of actions and requires diligent monitoring of operations and practices with and in foreign countries. Since 2005, FCPA enforcement actions brought by the SEC and the DOJ have increased by more than 600%.12 Fortunately, on November 14, 2012, the SEC and the DOJ provided guidance as to the application of and compliance with the FCPA with a Resource Guide to the US Foreign Corrupt Practices Act.13 The guide's main points of clarification relate to:
- The scope of the FCPA's anti-bribery and accounting provisions.
- What constitutes a foreign official.
- Proper and improper gifts and entertainment expenses.
- Parent and successor liability.
- The elements of an effective compliance program.
- Civil and criminal resolutions available.
- Procedures for obtaining DOJ opinions.
Importantly, the guide establishes that in order for conduct to trigger the FCPA it must 1) serve a business purpose, 2) be conducted with corrupt intent, 3) be a willful or voluntary act and 4) offer something of value to the public official. The guide contains several hypotheticals and examples to further elucidate the rules. The guide also discusses proper and improper gift and entertainment expenses when conducting business abroad and recommends the use of and provides tips for an effective corporate compliance policy. While not a change in SEC and DOJ interpretation of the FCPA, the guide provides a useful comprehensive repository of the agencies' current positions on and analysis of the FCPA as well as their viewpoint on enforcement.
SEC Adopts Rules Requiring Payment Disclosures by Resource Extraction Issuers
By: Mary Lovely
On August 22, 2012, the Securities Exchange Commission ("SEC") adopted Section 13q-1 of the Securities Exchange Act of 1934 ("Exchange Act") as mandated by Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd Frank Act"). Section 13q-1 requires resource extraction issuers to disclose certain payments made to the U.S. government or foreign governments annually by filing a new form with the SEC called Form SD. A resource extraction issuer must comply with the new rule for fiscal years ending after September 30, 2013 and Form SD must be filed with the SEC no later than 150 days after the end of the issuer's fiscal year. Resource extraction issuers are defined as issuers who are required to file an annual report with the SEC and who engage in the commercial development of oil, natural gas, or minerals, and includes domestic and foreign issuers and smaller reporting companies. Further, the issuer is required to disclose payments made by a subsidiary or another entity controlled by the issuer.
Section 13q-1 requires that resource extraction issuers disclose payments that are (1) made to further the commercial development of oil, natural gas, or minerals, (2) "not de minimis", and (3) within the types of payments specified in the rules. "Commercial development of oil, natural gas, or minerals" is defined as including the exploration, extraction, processing, and export, or the acquisition of a license for any such activity. "Not de minimis" is defined to mean any payment (whether a single payment or a series of related payments) that equals or exceeds $100,000 during the most recent fiscal year. Section 13q-1 requires the disclosure of payments including taxes, royalties, fees (including license fees), production entitlements, bonuses, dividends, and infrastructure improvements. Resource extraction issuers are required to provide the following information related to the payments made to further the commercial development of oil, natural gas or minerals: (1) type and total amount of payments made for each project; (2) type and total amount of payments made to each government; (3) total amounts of the payments, by category; (4) currency used to make the payments; (5) financial period in which the payments were made; (6) business segment of the resource extraction issuer that made the payments; (7) the government that received the payment, and the country that such government is located in; and (8) the project of the resource extraction issuer to which the payments relate.
The SEC declined to provide interpretive guidance regarding the terms "extraction," "processing," and "export," which means that many downstream issuers who are not directly involved in extractive activities may nevertheless be included in such definitions. Further, the SEC did not define the term "project," with the stated intention of allowing flexibility for various types and sizes of businesses. As a result, resource extraction issuers whose activities may, directly or indirectly, be characterized as the commercial development of oil, natural gas or minerals should begin considering methods of complying with the requirements of Section 13q-1 as soon as possible. For the first report on Form SD, resource extraction issuers may provide a partial report disclosing only those payments made during their fiscal year after September 30, 2013. The rule became effective on November 13, 2012.
1. 17 C.F.R. § 243.100. Final Rule: Selective Disclosure and Insider Trading, Exchange Act, Release No. 34-43154, 65 Fed. Reg. 51,716 (Aug. 15, 2000).
2. Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Netflix, Inc., and Reed Hastings, Release No. 34-.69279 (April 2, 2013).
3. 17 CFR § 243.101(e)(2).
4. Commission Guidance on the Use of Company Web Sites, Release No. 34-58288 (Aug. 7, 2008).
5. Robb Mandelbaum. "‘Crowdfudning’ Rules Are Unlikely to Meet Deadline." New York Times \\December 26, 2012.
6. http://www.sec.gov/spotlight/jobsact/crowdfundingexemption.htm.
7. http://www.sec.gov/divisions/marketreg/tmjobsact-crowdfundingintermediariesfaq.htm.
8. http://www.finra.org/Industry/Issues/Crowdfunding/.
9. http://www.sec.gov/comments/jobs-title-iii/jobstitleiii-227.pdf.
10. http://www.sec.gov/divisions/marketreg/mr-noaction/2013/funders-club-032613-15a1.pdf.
11. S. Rep. No. 95-114, at 6; H.R. Rep. 95-640, at 4; see also A. Carl Kotchian. "The Payoff: Lockheed’s 70-Day Mission to Tokyo." Saturday Rev., Jul. 9, 1977, at 7.
12. http://www.sec.gov/spotlight/fcpa/fcpa-cases.shtml.
13. http://www.justice.gov/iso/opa/resources/29520121114101438198031.pdf