Tuesday, February 22, 2011

E-Corporate Law Paper

Have you ever wondered if clicking "I accept" on a website was legally binding?  Or when can you "sign" a document by fax or e-mail?

I presented a paper to the UT-CLE Securites Regulation Conference earlier this month on E-Corporate Law.  The paper analyzes Texas, Delaware, and U.S. federal law regarding electronic contracting and electronic corporate formalities (such as directors taking action by unanimous written consent in lieu of a meeting).  It includes an analysis of the Electronic Signature In Global and National Commerce Act (E-Sign) and the Uniform Electronic Transactions Act (UETA).   

A copy of the paper is available on Cantey Hanger's website here:  http://www.canteyhanger.com/content/Clayton_SR11_paper_revised_02_10_11.pdf


Monday, February 14, 2011

Texas State Securities Board Commissioner Retires

Denise Voigt Crawford has been the Texas State Securities Board Commissioner since 1993.  She will be stepping down this month after 17 years of service in that roll.  I have had the pleasure of serving with Ms. Crawford on the Planning Committee for the University of Texas's Annual Conference on Securities Regulation and Business Law for several years, including serving on a panel with her discussing unregistered private offerings or securities and unregistered broker dealers at the 2010 conference.  Ms. Crawford is a true professional and a national leader in securities regulation and investor protection.  She will be missed. 

Monday, February 7, 2011

SEC Proposes Changes to Accredited Investor Definition

On January 25, 2011, the SEC proposed amendments to the definition of "accrdited investor" for the purposes of private placements under Regulation D and Section 4(5) (f/k/a Section 4(6)) of the Securities Act of 1933. 

As readers of this blog surely know, accredited investors are those more affluent investors who are deemed by the SEC to be sophisticated enough able to make investment decisions in private placements without the benefit of many of the issuer disclosure and registration requirments otherwise required by the Securities Act. 

For many years, among the parties who could claim accredited investor status was an investor who was a natural person with an invidual net worth, or joint net worth with that investor's spouse, in excess of $1,000,000.  Until the adioption of the Dodd-Frank Act in July of 2010, an investor could include the value of his or her home in determining whether or not the $1,000,000 threshold had been met.

As required by the Dodd-Frank Act, the definition of accredited investor now excludes the value of the primary residence of a natural person.  The SEC's proposed rules go on to clarify that the statutorily required phrase "excluding the value of the primary residence of such natural person" should be interpreted to mean that the natural person's net worth should be "calculated by subtracting from the estimated fair market value of the property the amount of debt secured by the property, up to the estimated fair market value of the property."

The purpose of the proposed rule changes are to (1) implement the definition change otherwise required by the Dodd-Frank Act, and (2) clarify that the investor's net worth will be calculated by excluding only the investor's net equity in the primary residence (not the entire value of the investor's home).