New directors and executive officers of public companies are often dismayed at the number of rules and regulations to which their new status has subjected them. Since corporate management is frequently not well-versed in the intricacies of federal securities law, it is incumbent on securities counsel to advise new directors and officers of their new responsibilities as early in the process as possible.
It is clear from my legal practice that this “well-meaning” regulation has also substantially raised the time, cost and expense for investors to deposit and sell securities of smaller priced issuers, whether purchased in private placements or SEC registered offerings; and at the same time, has disproportionately increased the risks associated with these types of transactions for issuers, transfer agents, broker-dealers and their clearing houses, along with associated costs to mitigate these risks.