Legal
SEC

Reg D Offerings, Online Deal Platforms Proliferate in Wake of Repeal of General Solicitation Ban

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Barely a month has passed since the SEC’s repeal of the ban on advertising Reg D private placement offerings became effective, and private placement agents have seized upon the new freedom to use online platforms to tout their deals. The agency said last week that more than $1 billion have been raised in 214 solicited private placements since the ban was officially lifted on Sept. 23. In statements to reporters following his testimony before the Senate Banking Committee, the SEC’s director of the division of corporation finance Keith Higgins said that there had been 170 news offerings that used the general solicitation safe harbor under Rule 506(c) of Regulation D to raise capital since the new rule became effective. An additional 44 offering that were commenced prior to the new rule’s effective date converted to 506(c) deals after Sept.

Legal
NanoViricides

Hot Development-stage Biotech Accused of Bad Behavior

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A veterinarian and a scientist have been raising millions in capital through Midtown Partners with registered direct offerings for their public biotech company NanoViricides (NNVC).  Another $10.3 million of stock in the $250 million market cap company, which was recently uplisted to the NYSE MKT, was sold to institutional investors in mid-September at a 26% discount to the closing price of the shares. But a group of early investors in the company has filed a shareholder derivative suit in Colorado federal court claiming company executives Anil Diwan and Eugene Seymour are abusing company assets and have breached their fiduciary duties. The investor group is led by Colorado resident Brian Brambell, who helped raise over $2.25 million of early seed money for Diwan and Seymour between 2007 and 2009. The company works on exploratory research to use plastic to attach to virus cells and expel them from the body.

Legal
Mark Cuban

Maverick Justice

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Mark Cuban

If there are any lessons to be learned from this week’s not guilty verdict in the SEC vs. Mark Cuban insider trading case, it must be that it’s good to be king. Or at least a billionaire, a celebrity, and a Texan. Mark Cuban, brash dot-com billionaire, professional sports team owner, reality TV show celebrity, and sometime microcap company investor, was acquitted of insider trading charges in Dallas federal district court last week. The verdict was reached by a hometown jury which took three and a half hours to decide that taking a call from the CEO of a public company in which he was the largest single investor, to be told about an impending and unannounced private placement which would dilute his holdings and almost certainly lower the value of his investment, to which he did not dispute that he replied, “Now I’m screwed.

Legal
STI

Update: SunTrust Pays $1.2B to Settle Shoddy Mortgage Charges

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SunTrust Bank (STI) will pay penalties totaling more than $1.2 billion to settle charges it used abusive foreclosure practices, and originated and sold shoddy mortgages to Fannie Mae and Freddy Mac under settlements reached with the two government-sponsored loan agencies, 49 state attorneys general, and the U.S. Justice Department, the bank announced last week. The bank will pay $468 million in cash and provide relief to borrowers valued at $500 million in a settlement with the DOJ, HUD, and the Federal Reserve, plus more than $200 million to Fannie Mae and Freddie Mac. The payments include $160 million to settle claims with the states and federal regulators that it “robo-signed” foreclosure documents. The bank also settled charges it originated and sold shoddy loans to Fannie Mae and Freddy Mac. The bank agreed to pay $373 million to Fannie Mae and $65 million to Freddy Mac.