Securities & Finance
What Securities Services Can Easler Law Provide?
Easler Law can assist in drafting the necessary documents, managing subscribers, and complying with reporting obligations.
Here are a few of the types of services we can offer in securities and finance:
- Rule 144 Legend Removals
- General Opinion Letters
- Developing a Capital Investment Plan
- Selecting Financial Instruments
- Drafting Offering Memorandums and Prospectuses
- Drafting Subscription Agreements
- Establishing Real Estate Investment Trusts (REITs)
- Maintaining Shareholder/Subscriber Registries
- Holding Annual Meetings
- Transfer Agency Services
- EDGAR Filing and Reporting Services
- Applying for Government Funding
- Compliance with State and Federal Regulations
While the idea or raising capital or investing in a new venture is exciting, inexperience can easily lead to extremely costly mistakes.
There is no single web page, book, or YouTube video that can eliminate the possibility of making a mistake. That is why finding a competent law firm for securities and finance transactions is critical. This field is heavily regulated and violations can lead to heavy fines, damage to reputation, and even jail time.
Securities and financial transactions are highly regulated by a variety of government agencies including the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), the Federal Trade Commission (FTC), state and local governmental agencies, and many others.
If non-compliant, an organization or individual can be subject to severe monetary penalties, injury to reputation, injunctions, restrictions, and even imprisonment.
Heavy regulations in the United States are designed to protect American investors, lenders, and organizations, and to ultimately maintain stability in the market. Something as simple as failing to provide notice or even delaying notice to shareholders can result in violation of regulations.
Staying up to date with new laws and regulations is not just part of our job, it is our commitment to our clients. We can guide you and your business through the process of securities transactions to ensure compliance and avoid inadvertent violations.
If securities scandals like the 2008 Madoff Ponzi Scheme have an inherent lesson, it is that no matter your age, education, or experience level, everyone can fall prey to scams, frauds, and pump-and-dump schemes. We can help by performing due diligence on a company before a major investment or transaction and by issuing an opinion letter. While due diligence can’t guarantee a successful or profitable transaction, it can help discover red flags and warning signs.
Likewise, if you are raising capital, gaining new investors, or going public, we can help prepare offering documents and assist with facilitating due diligence on your company.
If you plan on accepting money or other capital in exchange for debt or equity in your business, or if you plan on paying money or other capital in exchange for debt or equity in someone else’s business, you will want the guidance of an experienced law firm like Easler Law.
While some projects and businesses can grow at a steady pace using existing capital and cash flow, others benefit from the injection of outside capital. There are several methods to obtain capital ranging from loans, bonds, debentures, and crowdfunding, to equity and capital markets. Each method of obtaining capital has its own benefits and drawbacks.
What are Securities?
A security is a financial instrument used to make investments. There are several different types of securities, but they may be categorized broadly as either equity securities, debt securities, or a combination of both.
A security in equity means you have partial ownership in a company, commonly seen as “stock” in a corporation. If the business you invest in does well and becomes profitable, the value of the stock increases, raising the stock price of the shares you own and opening up the possibility of dividends. When you own stocks, you are considered a shareholder and may receive earnings called dividends. Dividends are distributions of profit or equities to shareholders in proportion to their fraction of equity in the company. The main reason equity securities are issued is to raise capital for the company that, in turn, can use to expand or meet market demand. The value of stocks are subject to market demand and thus their worth fluctuates depending on the financial market, the relative value of the company, and even the reputation of its management.
What are Debt Securities?
Investing in debt securities involves lending money to a company under a predetermined set of terms instead of taking ownership in the business itself. A common debt security is a bond. A bond works like a loan, but the investor buys them from a business, city, or county with the requirement it will be paid back later with interest on a specified future date. In the United States, when a debt security is backed by physical assets, it is typically referred to as a bond while a debt security that is secured only by the promise of the company to pay (unsecured), it is referred to as a debenture.
One combination of debt and equity investment is known as a convertible bond or convertible debenture. This gives the investor a clear exit plan through a traditional bond or debenture but then provides for an option to “convert” that debt into equity at a later date. Thus, if on that date the value of the equity is greater than the value of the outstanding debt, the investor could exercise the option to convert to equity and make a greater profit. Otherwise, if the value of the debt is greater than the value of the equity, the investor will simply not exercise the option and recover under the debt instrument instead.
There are several other security instruments available but regardless of the type of security you plan to invest in or raise capital through, getting the knowledge you need in making the best decision for you or your business is key. Easler Law can help you make the most informed decision for your future. Our securities team has experience working with companies’ initial public offerings (IPOs), mergers, dual listing, listing on foreign exchanges, and coordinating with exchanges, market makers, and broker dealers.
The term “finance” elicits ideas about money, budgeting, or borrowing. Finance encompasses all of that and more. Finance and financial compliance can be overwhelming, that is why creating a structure for your financial needs is important to stay on track, save you time, and avoid headaches in the long run. Our goal is to help you execute your financial goals while ensuring all applicable rules and regulations are met.
A variety of domestic and international laws may apply to your financial activity when operating a business or investing in the United States or internationally. When sending funds or other capital around the globe there are investigatory and reporting obligations that may apply. We can assist with compliance and reporting requirements involved with regulated financial transactions under a wide range of laws such as the Foreign Corrupt Practices Act (FCPA), Commodity Exchange Act (CEA), Dodd-Frank Act (DFA), and other state and federal laws. In addition, we can assist with applications for and compliance with federal funding under grant programs and lending programs such as United States Small Business Administration (SBA) loans.