Those developments came after Emergent’s stock price had tumbled on Feb. 19, following the company’s published financial results. All told, Emergent stock has fallen since mid-February to about $62 a share from $125 a share, or just more than 50 percent.

But the decline has had less of an impact than it might have on the personal finances of Emergent’s chief executive, Robert G. Kramer, who sold more than $10 million worth of his stock in the company in January and early February, securities filings show. Based on the market price, the stocks that Kramer sold would now fetch about $5.5 million.

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The transactions were Kramer’s first substantive sales of Emergent stock since April 2016, according to a review of securities filings by The Washington Post.

Those 2016 sales by Kramer, along with sales by other Emergent executives around the same time, were the subject of a lawsuit brought by investors who alleged that executives offloaded stocks after making misleading claims about the scale of an upcoming order from the government for an anthrax vaccine. When the order turned out to be smaller than analysts anticipated, the share price fell. Emergent denied the allegations, but the parties later agreed to a settlement in which Emergent paid the investors $6.5 million.

Kramer made his recent sales by exercising stock options that Emergent had awarded him as part of his compensation package in past years. Those options allowed him to buy the stocks for about $2.5 million, and he then sold them at market price. Kramer’s remaining stake in Emergent is worth about $10.1 million, according to securities filings, and he has almost 60,000 stock options that he may begin exercising next year.

Kramer’s sales were made as part of a trading plan that he adopted on Nov. 13, according to securities filings. Such plans, which establish in advance when stocks are to be bought and sold, are intended to protect company insiders from suggestions that they traded on the basis of confidential information that would influence the stock price, which is unlawful.

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Citing internal logs, the New York Times reported this month that one batch of AstraZeneca’s coronavirus vaccine that was being prepared at Emergent’s plant was discarded in October 2020 because of suspected contamination, and that a quantity of Johnson & Johnson vaccine was discarded at some point in November following an error by workers involving a gas line.

In July 2020, a company that had hired Emergent to make an experimental ricin vaccine filed a confidential arbitration demand for $19 million in damages, saying Emergent had disclosed after study participants had already received doses that it had supplied drugs that were outside of specification, The Post also reported. Emergent has denied liability for the damages. The company that hired Emergent disclosed the arbitration demand in its securities filings.

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Kramer did not respond to an email seeking comment.

Emergent spokeswoman Nina DeLorenzo did not directly respond to questions from The Post about whether Kramer was aware of problems in Emergent’s coronavirus vaccine production or information from upcoming financial results when he adopted his trading plan.

“All of Mr. Kramer’s sales were previously scheduled under 10b5-1 trading plans,” DeLorenzo said, referring to the Securities and Exchange Commission rule on trading by insiders.

“Mr. Kramer, our executive team, and our board of directors are held to the highest ethical standards and follow strict compliance with all laws and regulations governing financial transactions. Any insinuation of wrongdoing is without evidence or merit,” DeLorenzo said.

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Investors sued Emergent, Kramer and other executives in federal court in Maryland last week, alleging that the firm artificially inflated its stock price by boasting of its ability to make coronavirus vaccines and by failing to disclose problems at the Baltimore site, which is known as Bayview.

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At least three other law firms announced this month that they were looking into the company’s handling of the information about production problems.

Kramer, 64, has led Emergent as chief executive since April 2019 and serves as the company’s president and as a member of its board of directors. He was previously the firm’s chief operating officer and, before that, its chief financial officer. Kramer joined Emergent in 1999, the year after the firm, then named BioPort, bought a state-run laboratory in Lansing, Mich., and took over its contract to supply anthrax vaccine to the government.

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Since 2012, the first year that his full pay package was publicly reported by Emergent, Kramer has received compensation totaling $20.1 million, according to the company’s securities filings. Most of that has been awarded to him in the form of Emergent stock and stock options, which have grown in value as Emergent’s share price has risen. Kramer received a 51 percent increase to his total compensation in 2020, the company disclosed this month.

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Unlike several of his fellow senior Emergent executives and directors, who have sold company stock more frequently, Kramer has rarely sold holdings in the company in recent years, a review of securities filings shows. For almost five years before his 2021 stock sales, Kramer disposed of comparatively small amounts of stock — about $161,000 worth every 12 months — apparently to cover taxes triggered when he received stock awards, according to the filings. Such transactions are common and have their own classification code in securities filings to distinguish them from ordinary sales.

The last time Kramer made substantive sales of Emergent stock, in the spring of 2016, involved the transactions that were scrutinized as part of the lawsuit against the firm. The suit was filed in July of that year by a Connecticut-based investor named William Sponn, who sued Emergent, Kramer and three other senior Emergent executives in a federal court in Greenbelt, Md.

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Sponn was soon joined by a pair of pension funds for police officers and firefighters in Florida that also owned Emergent stock. In their suit, the group alleged that the company made overly positive statements about a possible government contract for several months, culminating in a May 5, 2016, announcement that it had secured a government contract for “significantly increased deliveries” of anthrax vaccine. Emergent’s share price increased by 15 percent in the weeks after that company announcement.

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On June 22, the company disclosed that the contract actually entailed a significant decrease in deliveries in the short term, and the company’s share price subsequently fell by 20 percent.

The investors noted in their complaint that the four senior executives had sold Emergent stock totaling more than $14.5 million between March and the disappointing news in June that dragged down the share price. Kramer, then Emergent’s chief financial officer, sold 87,146 shares for $3.2 million in multiple transactions during the first six days of April 2016, securities filings show. The investors accused Kramer and his fellow executives of participating in a “fraudulent scheme” against ordinary shareholders, which Emergent and the executives vehemently denied.

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The investors alleged that Daniel Abdun-Nabi, then Emergent’s chief executive, tried to boost the share price by saying in a May 5, 2016, conference call with Wall Street analysts that the anthrax vaccine contract would be “one big, beautiful package.”

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Emergent denied that claim, saying that Abdun-Nabi’s statement was merely “puffery” and that the company had warned that the government’s demand for anthrax vaccine could change. Emergent asked U.S. District Judge Roger W. Titus to dismiss the lawsuit.

Titus denied Emergent’s motion, saying at a hearing that Abdun-Nabi’s remark “created a false belief in the minds of the market and the plaintiffs” and that the investors’ allegations were sufficient to proceed, according to a transcript filed in court.

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Titus said at the July 2017 hearing that the investors’ allegation of deliberate wrongdoing was “bolstered by the insider trading that took place,” adding that “to see these sales take place is disturbing.”

When asked by an attorney for Emergent to clarify how Abdun-Nabi’s remark had figured in his decision, Titus said, “I think May 5th is where this case goes from puffery to fraud,” according to the transcript.

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Attorneys for Emergent emphasized that Kramer and other executives had made their sales under a predetermined trading plan, as Kramer did for the transactions this year. But the investors said in response that plans were adopted by Kramer and another executive within the period that they were alleging Emergent made misleading statements about the anthrax vaccine order, a point that Titus noted in court.

Titus granted the investors class-action status, opening the door for other investors who had bought Emergent stock during the disputed period to make their own claims for compensation. Emergent appealed that decision at the U.S. Court of Appeals for the 4th Circuit, which declined to hear the matter.

In October 2018, Emergent and the investors settled the case, agreeing that Emergent would pay $6.5 million. The agreement emphasized that Emergent and its executives continued to deny any wrongdoing and that both sides had agreed to settle to save on judicial resources and litigation expenses.

In the years since the lawsuit, Emergent’s stock price has risen on the back of steadily increasing revenue that has been fueled by contracts with the federal government. Emergent has acquired multiple new products, including a smallpox vaccine for which it signed a supply deal with the Strategic National Stockpile worth up to $2.8 billion in September 2019. The company reported total revenue of $1.56 billion in 2020, a 41 percent increase over 2019.

The Post reported last year that the company had benefited as government health officials overseeing the stockpile prioritized defenses against biological and chemical terrorist attacks over preparations for a national pandemic, which many experts considered the more pressing threat. The Post reported that Robert Kadlec, the preparedness chief at the Department of Health and Human Services under President Donald Trump, had been paid as a consultant by Emergent and formed a start-up with the company’s founder, Fuad El-Hibri, before joining Trump’s administration.

Kadlec did not mention either role in a questionnaire about his career that he submitted to the Senate as it considered his nomination. Kadlec and the firm said his past roles had no impact on the contracts with the government.

Emergent also has contracts worth up to $195 million with the State Department and the Defense Department to supply injectors containing treatments for exposure to chemical weapons. The Post reported last year that Emergent’s injector program suffered production problems and that the company had recalled tens of thousands of devices from foreign customers. Emergent said a flaw in a small minority of devices had been discovered by the company’s “rigorous quality processes” and that no injectors sold to U.S. authorities were affected.

Emergent’s rise continued last year when the company on June 1 announced a $628 million contract with the government’s Operation Warp Speed, which helped fund the rapid development of coronavirus vaccines.

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Veteran investor Jim Rogers, who co-founded the Quantum Fund with billionaire investor George Soros, is still worried about governments outlawing bitcoin and other cryptocurrencies. “If cryptocurrencies become successful, most governments will outlaw them, because they don’t want to lose their monopoly,” he said.
Jim Rogers Still Worried About Government Banning Bitcoin
Renowned investor and George Soros’ former business partner who co-founded of the Quantum Fund and Soros Fund Management, Jim Rogers, still believes that the government can ban bitcoin and other cryptocurrencies.
Noting that he “never bought or sold any cryptocurrencies,” Rogers told Kitco News’ Michelle Makori last week:

If cryptocurrencies become successful, most governments will outlaw them, because they don’t want to lose their monopoly.

“Every government in the world is working on computer money now, including the U.S. The Chinese are there already. I cannot imagine that governments are going to say ‘ok, this is our crypto money, or you can use their crypto money.’ That’s not the way governments work, historically,” he opined.
Rogers added: “Money is going to be on the computer. It already is in China. In China, you can’t take a taxi with money. You have to have the money on your phone, you can’t even buy ice cream. So it’s happening, but I doubt if it’s going to be someone else’s money. History shows it will be government money.”
He believes that the biggest threat to bitcoin is government regulation “if it becomes successful,” but not “as long as it remains a trading vehicle.”
The Quantum Fund co-founder further noted:

I know guys that are making a lot of money trading it, it’s a wonderful trading vehicle, apparently. But, if it becomes a currency, which is what the crypto people say that it will be, I cannot imagine that any government, or many governments, in the world will say ‘ok, you can use our money, or their money.’ That’s not what history shows.

Commenting on the Federal Reserve Chairman Jerome Powell comparing bitcoin to gold in terms of how they are both used for speculation, Rogers agreed that people are using both as trading vehicles. However, he added that history would indicate that silver and gold would probably have a better future than cryptocurrencies because they are not trying to compete with the dollar or other sovereign currencies.
Rogers is not the only one who has warned about governments stepping in and outlawing cryptocurrencies. Others include Bridgewater Associates founder Ray Dalio, The Big Short’s Michael Burry, and Ron Paul.
However, many people also said that governments cannot outlaw bitcoin. A commissioner with the U.S. Securities and Exchange Commission (SEC), Hester Peirce, recently said that governments would be “foolish” to try to ban bitcoin and that banning it would be like shutting down the internet. In addition, she said that “it’s very difficult to ban something that’s essentially a peer-to-peer technology.”
Do you think Jim Rogers’ fear about the government banning bitcoin is unfounded? Let us know in the comments section below.

Tags in this story
ban bitcoin, ban crypto, Ban Cryptocurrencies, banning, government banning, jim rogers, jim rogers bitcoin, jim rogers crypto, jim rogers cryptocurrency, outlaw, prohibiting

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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“We are very glad to be able to flexibly accommodate our client’s expanded needs through our facilities,” John Rim, CEO of Samsung Biologics, commented. Rim added, “By supporting TG Therapeutics in this partnership, we are contributing to bringing needed treatments to patients around the world and getting a step closer to our vision of bringing about a better life for humanity.”

Michael S. Weiss, Executive Chairman and CEO of TG Therapeutics, stated, “Samsung is the global leader in biologics manufacturing and we are happy to have them as our partner as we look forward to the potential commercialization of ublituximab across both oncology and autoimmune indications. With the recent positive ULTIMATE I and II MS Phase 3 studies, we re-evaluated our supply needs and were very pleased we were able to secure the long-term capacity we believe we will need to meet the potential global demand for ublituximab. This is an important next step in our long-standing relationship with Samsung.”
In order to support all its current and potential clients around the world, Samsung Biologics is currently building its fourth and largest biomanufacturing facility in Incheon, Korea. Upon completion of the said plant in 2023, Samsung Biologics will hold 620,000 liters of biomanufacturing capacity, or approximately a quarter of the entire bio-CMO capacity globally. The company provides contract manufacturing, contract development, and testing services all from a single location, offering end-to-end services for its clients.
ABOUT UBLITUXIMABUblituximab is an investigational glycoengineered monoclonal antibody that targets a unique epitope on CD20-expressing B-cells. When ublituximab binds to the B-cell it triggers a series of immunological reactions, including antibody-dependent cellular cytotoxicity (ADCC) and complement dependent cytotoxicity (CDC), leading to destruction of the cell. Additionally, ublituximab is uniquely designed, to lack certain sugar molecules normally expressed on the antibody. Removal of these sugar molecules, a process called glycoengineering, has been shown to enhance the potency of ublituximab, especially the ADCC activity. Targeting CD20 using monoclonal antibodies has proven to be an important therapeutic approach for the management of B-cell malignancies and autoimmune disorders, both diseases driven by the abnormal growth or function of B-cells.
ABOUT TG THERAPEUTICS, INC.TG Therapeutics is a fully-integrated, commercial stage biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases. In addition to an active research pipeline including five investigational medicines across these therapeutic areas, TG has received accelerated approval from the U.S. FDA for UKONIQ™ (umbralisib), for the treatment of adult patients with relapsed/refractory marginal zone lymphoma who have received at least one prior anti-CD20-based regimen and relapsed/refractory follicular lymphoma who have received at least three prior lines of systemic therapies. Currently, the Company has two programs in Phase 3 development for the treatment of patients with relapsing forms of multiple sclerosis (RMS) and patients with chronic lymphocytic leukemia (CLL) and several investigational medicines in Phase 1 clinical development. For more information, visit www.tgtherapeutics.com, and follow us on Twitter @TGTherapeutics and LinkedIn.
UKONIQ™ is a trademark of TG Therapeutics, Inc.
About Samsung Biologics Co., Ltd.Samsung Biologics (KRX: 207940.KS) is a fully integrated CDMO offering state-of-the-art contract development, manufacturing, and laboratory testing services. With proven regulatory approvals, the largest capacity, and the fastest throughput, Samsung Biologics is an award-winning partner of choice and is uniquely able to support the development and manufacturing of biologics products at every stage of the process while meeting the evolving needs of biopharmaceutical companies worldwide. For more information, visit www.samsungbiologics.com.
Samsung Biologics Forward-looking StatementSamsung Biologics Forward-looking Statements This press release contains certain statements that constitute forward-looking statements, including statements that describe Samsung Biologics’ objectives, plans or goals. All such forward-looking statements, and the assumptions on which they are based, are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. There can be no assurance that the results and events contemplated by the forward-looking statements contained herein will in fact occur. Except as required by law, Samsung Biologics will not update any forward-looking statements to reflect material developments that may occur after the date of this press release.
TG Therapeutics, Inc. Cautionary Statement 
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements relating to the development and potential commercialization of ublituximab, the relationship with Samsung, and the supply of ublituximab.  In addition to the risk factors identified from time to time in our reports filed with the U.S. Securities and Exchange Commission, factors that could cause our actual results to differ materially are the following: the risk that ublituximab will not be approved by the FDA or any other regulatory authority for CLL, RMS, or any other indication; the risk that ublituximab will not be commercially successful if approved; our ability to successfully and cost effectively complete preclinical and clinical trials; the Company’s reliance on third parties for manufacturing, distribution and supply, and a range of other support functions for its clinical and commercial products, including ublituximab; the uncertainties inherent in research and development; and the risk that the ongoing COVID-19 pandemic and associated government control measures have an adverse impact on our research and development plans or commercialization efforts. Further discussion about these and other risks and uncertainties can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in our other filings with the U.S. Securities and Exchange Commission.
Any forward-looking statements set forth in this press release speak only as of the date of this press release. We do not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. This press release and prior releases are available at www.tgtherapeutics.com. The information found on our website is not incorporated by reference into this press release and is included for reference purposes only.
TG THERAPEUTICS CONTACT INFORMATION:
Investor Relations
Email: [email protected]
Telephone: 1.877.575.TGTX (8489), Option 4
Media Relations:
Email: [email protected]
Telephone: 1.877.575.TGTX (8489), Option 6
SAMSUNG BIOLOGICS CONTACT INFORMATION:
Media Relations:
Email: [email protected]
SOURCE Samsung Biologics

Related Links
https://samsungbiologics.

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For those who care about a just society and a planet that will support human life for generations to come, the Trump administration was a disaster in so many dramatic ways that the list is too long and depressing for me to contemplate. So instead let me draw your attention to its virtual gutting of the Public Company Accounting Oversight Board (PCAOB) which opened its doors in Washington, D.C. on January 6, 2003. I realize that most people haven’t heard of this seemingly obscure agency. Yet it plays an essential role in maintaining the integrity of our capital markets on which all of us depend. As noted by Lynn Turner, former Chief Accountant of the Securities and Exchange Commission, “The PCAOB is so vitally important to all Investors in American capital markets. It is who ensures we can trust the financial information necessary for making wise investment decisions.”

DENVER, COLO. – APRIL 7, 2005 – Lynn Turner, former SEC chief accountant, interviewed at The Denver … [+] Post. (Jerry Cleveland | The Denver Post) (Photo By Jerry Cleveland/The Denver Post via Getty Images)
Denver Post via Getty Images

Here is the stated mission of the PCAOB: “The PCAOB oversees the audits of public companies and SEC-registered brokers and dealers in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports.” What’s not to like here, right? The PCAOB was created in the Sarbanes-Oxley Act of 2002 (SOX) which was a response to the bursting of the dotcom bubble of the 1990s and a series of accounting scandals and fraud, such as Enron and WorldCom, and the collapse of the accounting firm Arthur Andersen. In essence, the PCAOB stripped self-regulation by the accounting profession of audit quality and methodologies and replaced it with a government department under the direction of the Securities and Exchange Commission and funded through SOX.  
Cynthia A. Fornelli, the first Executive Director of the Center for Audit Quality (CAQ), has written about the early turbulent years of the PCAOB and the to-be-expected criticisms of conservatives who oppose any kind of government regulation intended to improve the integrity and transparency of our capital markets. She noted, for example, that in 2009 Steve Forbes “argued that the PCAOB was ‘evil,’ ‘one of the most powerful and destructive agencies in Washington,’ and ‘an accounting version of Nurse Ratched from One Flew Over the Cuckoo’s Nest.’” My goodness! What hysterical words to describe an agency simply designed to improve audit quantity for the benefit of investors, companies, auditors, and all of us.

Thankfully, the PCAOB weathered the stormy early years of being a new agency in D.C. Tough Town and became a strong force for the public good. Until recently. Under current Chairman William D. Dunkhe III, sworn in on January 2, 2018 (and whose appointment unfortunately extends until October 24, 2022) and an entirely new slate of five board members appointed starting in early 2017, the PCAOB has become a shadow of its former self. Barbara Roper, Director of Investor Protection at the Consumer Federation of America, explained it this way: “The PCAOB plays a vitally important role in the oversight of our capital markets, but it has all but abandoned its investor protection mission. It will take a top-to-bottom overhaul to restore its effectiveness and its credibility.” This is not hyperbole, just a statement of fact.

Barbara Roper, Director of Investor Protection, Consumer Federation of America
Consumer Federation of America

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Evidence of this is carefully documented in a candid and constructive letter of April 19, 2021 was sent to the new SEC Chairman, Gary Gensler. The authors of the letter are a distinguished group of former members of the PCAOB’s Investor Advisory Group (IAG). The mission of the IAG is to provide a forum so that the PCAOB “may obtain the views and advice of experts who have a demonstrated history of commitment to investor protection.” The approximately 15 members are “individuals of the highest integrity with the expertise and experience in relevant areas, including investing in public companies.” The 11 authors of the letter wrote in their individual capacity and all of them have distinguished backgrounds in investing, accounting, and investor protection including Professor Praveen P. Gupta (a former SEC Academic Fellow), Roper, Anne Simpson (Managing Investment Director at the California Public Employees’ Retirement System), and Turner. Consider the trenchant points they make with my own reflections in parentheses:
·     The replacement of the entire board and the essential firing of the General Counsel, Chief Auditor, Director of Information Technology, and dozens of others has vastly undermined the ability of the PCAOB to fulfill its purpose. (One of the most effective ways to keep an organization from fulfilling its mission is to get rid of the most important and competent people.)
·     In 2018 the PCOAB moved to reduce its own budget, including for the critical inspections function. The Strategic Plan of that year says next to nothing about investor protection and enforcement of standards. (Perhaps with malicious intent, the PCOAB even managed to not live up to its own extremely unambitious strategic plan.)
·     Since Mr. Dunkhe became Chairman, the PCAOB has not held a single meeting of the IAG. (Why meet with people whose interests you’re supposed to protect if they might give you some constructive feedback and you could better spend time on the links with the President?)
·     The PCAOB no longer solicits public comment on PCAOB rulemaking. (Sure is a lot easier to just spend a few minutes before golf coming up with a few new rules and not have to get any input on them.)
·     There is still a holdover of auditing standards that “were written in an era of flawed self-regulation that failed to prioritize the interests of investors and the public.” (In fairness, previous administrations own this as well.)
·     In March 2021 the PCAOB created and adopted a new charter for its Standards Advisory Group (SAG) that replaces all former members, makes what were public meetings for 16 years now private meetings, limits the ability of investor advocates to serve on the SAG, and gives the PCAOB the unilateral ability to set the agenda for the SAG, whereas this used to be done jointly. (What an elegant way to shut down any investor input and make sure there’s nothing on the agenda you don’t want to talk about and would delay tee time!)
In light of all these points, I suspect the Trump administration would have loved to simply abolish the PCAOB if law allowed. Since it didn’t, they did everything possible to eviscerate it.
The letter signatories rightly note that “The circumstances surrounding the PCAOB compel the SEC to take immediate and assertive action to reverse the damage done over the past four years.” They propose these initial action items:
·     Fill the current vacancy on the Board with a highly competent person who is independent of any auditing firm and who has been “historically supportive of investors’ concerns relating to audit firm oversight and independence.”
·     Have this person replaced Mr. Dunkhe as the Chairman.
·     Reinstate the IAG and SAG “with competent, diverse, and investor-focused voices.”
The letter concludes that “Together, these initial actions should begin to restore investors’ confidence in the public company audit process in the United States, however, more reforms will be ultimately needed.”

Anne Simpson, Managing Investment Director, California Public Employees’ Retirement System
California Public Employees’ Retirement System
More pointedly, Simpson stated that “The PCAOB needs to be restored from the ashes. It was viewed as the gold standard for audit regulation worldwide, and its sad demise is a cause for concern by investors who rely upon the veracity of corporate accounting for both capital allocation and stewardship. Time for restoration.” She’s absolutely right.
We all owe thanks to her and the other authors of this letter. They have brought to the attention of Mr. Gensler some severe damage from the previous administration that few of us would have noticed. But not being noticed doesn’t mean that its effects can’t be hugely deleterious.
I have great confidence that Mr. Gensler will act swiftly to take the appropriate steps to restore the PCAOB to its important role in protecting the integrity of our capital markets through effective oversight of the auditing firms. These improvements won’t be noticed by most of us either. But they will improve our capital markets today to the benefit the generations to come.

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The Securities and Exchange Commission (SEC) has approved the amendments to the Implementing Rules and Regulations (IRR) of the Securities Regulation Code (SRC), including the expanded list of entities deemed as qualified buyers.
 Section 8 of the SRC provides that securities shall not be sold or offered for sale or distribution in the Philippines without a registration statement duly filed with and approved by the Commission.
 The law provides for certain exceptions to the registration requirements laid down under Sections 8 and 12 for securities issued or guaranteed by, among others, the Philippine government, the government of any country with diplomatic relations with the Philippines, banks except their own shares of stock, multilateral financial entities established through a treaty or any other binding agreement involving the Philippines. 

In addition, Sections 8 and 12 of the SRC shall not apply to securities issued and sold to qualified buyers identified under Section 10.1(1) of the Code and further enumerated under SRC Rule 10.1.3.
Under the recently approved amendments, the SEC will now consider as qualified buyers registered securities dealers, accounts managed by a registered broker under a discretionary arrangement, and registered investment companies, such as mutual fund companies. 
The list of qualified buyers shall also include provident funds or pension funds maintained by a government agency or by a government or private corporation and managed by an entity authorized accordingly by the Bangko Sentral ng Pilipinas (BSP) or SEC, as well as a trust corporation that is authorized by the central bank to perform the acts of a trustee. 

Also included in the list are funds established and covered by a trust or investment management agreement (IMA) under a discretionary or non-discretionary arrangement, in accordance with rules and regulations of the BSP. 
Those under a non-discretionary arrangement are subject to additional requirements, such as the beneficial owner or principal of such funds having qualifications on financial capacity and sophistication as specified in the 2015 SRC Rules 10.1.11.1 for natural persons and 10.1.11.2 for juridical persons, among others. 
Further, a fund established and covered by a trust or IMA whose beneficial owner or principal is deemed as a qualified buyer, and an entity with quasi bank license issued by the central bank have been added to the list of qualified buyers.
Additionally, the following entities will be deemed qualified buyers: pre-need companies authorized by the Insurance Commission; authorized collective investment schemes; a listed entity that engages the service of a professional fund manager; and a foreign entity that, if established or incorporated in the Philippines, would be covered by the aforementioned descriptions. 
The Commission may also determine as qualified buyers, by rule or order, such other persons on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial and business matters, or amount of assets under management.
The previous list of qualified buyers only included banks, registered investment houses, insurance companies, and pension funds or retirement plans maintained by the government, among others.
The recently approved amendments also reflect in SRC Rule 9 provisions pertaining to the list of securities exempt from the registration requirements, as provided under Section 9 of the SRC.

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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Vereit Inc (NYSE:VER), so let’s take a closer look at the sentiment that surrounds it in the current quarter.Is VER stock a buy? Vereit Inc (NYSE:VER) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 44. VER has seen an increase in enthusiasm from smart money in recent months. There were 18 hedge funds in our database with VER positions at the end of the third quarter. Our calculations also showed that VER isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.Stuart Zimmer Zimmer PartnersStuart Zimmer of Zimmer PartnersAt Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s go over the recent hedge fund action regarding Vereit Inc (NYSE:VER).Story continuesDo Hedge Funds Think VER Is A Good Stock To Buy Now?At the end of December, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VER over the last 22 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).Is VER A Good Stock To Buy?More specifically, Redwood Capital Management was the largest shareholder of Vereit Inc (NYSE:VER), with a stake worth $160.2 million reported as of the end of December. Trailing Redwood Capital Management was Citadel Investment Group, which amassed a stake valued at $140.8 million. Glendon Capital Management, Zimmer Partners, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Glendon Capital Management allocated the biggest weight to Vereit Inc (NYSE:VER), around 19.79% of its 13F portfolio. Redwood Capital Management is also relatively very bullish on the stock, dishing out 9.77 percent of its 13F equity portfolio to VER.With a general bullishness amongst the heavyweights, key hedge funds have jumped into Vereit Inc (NYSE:VER) headfirst. Gillson Capital, managed by Daniel Johnson, created the largest position in Vereit Inc (NYSE:VER). Gillson Capital had $19.1 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also initiated a $13.8 million position during the quarter. The other funds with brand new VER positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Paul Tudor Jones’s Tudor Investment Corp, and Greg Eisner’s Engineers Gate Manager.Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Vereit Inc (NYSE:VER) but similarly valued. We will take a look at Omega Healthcare Investors Inc (NYSE:OHI), Encompass Health Corporation (NYSE:EHC), Companhia Siderurgica Nacional (NYSE:SID), Owens Corning (NYSE:OC), Gold Fields Limited (NYSE:GFI), Ciena Corporation (NASDAQ:CIEN), and Vedanta Ltd (NYSE:VEDL). This group of stocks’ market valuations are closest to VER’s market valuation.View table here if you experience formatting issues.As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $290 million. That figure was $684 million in VER’s case. Owens Corning (NYSE:OC) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 9 bullish hedge fund positions. Vereit Inc (NYSE:VER) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VER is 49.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately VER wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on VER were disappointed as the stock returned 9.1% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.Get real-time email alerts: Follow Vereit Inc. (NYSE:VER)Disclosure: None. This article was originally published at Insider Monkey.

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TipRanks3 “Strong Buy” Stocks Under $10 That Are Poised to Take OffCOVID is receding, and markets are rising; those are the two trends that investors have most on their minds right now. It’s entirely sensible that they’ll go together. As the economy reopens, money will begin to circulate faster – and find its way in the equity market. With economic conditions improving, investors are on the lookout for the best returns in an expansionary environment. One natural place for them to look: the small-caps market. While big names get the headlines, the small-cap stocks offer the highest returns. With this in mind, we’ve used the TipRanks database to seek out three stocks that meet a profile for growth under current conditions. We’ve found three Strong Buy small-cap stocks – valued under $700 million – that are trading below $10. Not to mention substantial upside potential is on the table. Shift Technologies (SFT) Not least among the changes we saw during the pandemic year was the strong shift toward online business and e-commerce. Shift Technologies brought e-commerce to the used car market, with an end-to-end, hassle-free sales model designed to streamline the customer’s experience. Shift provides digital solutions connecting car owners and buyers, making it easy to find a car, test drive it, and purchase it. Currently, Shift is operating in California, Oregon, Washington state, and Texas, primarily in urban centers. Like many smaller tech-oriented companies, Shift went public last year through a SPAC merger. In this case, the special acquisition company (SPAC) was Insurance Acquisition Corporation. The merger was completed in October, in a transaction valued between $340 million and $380 million. The SFT ticker started trading on the NASDAQ on October 15. Since then, the stock has slipped 35%, leaving the company with a market cap of $602 million. Despite the slip in share value after completion of the merger, Shift still had some $300 million in newly available capital to conduct operations. The company has plenty of room to maneuver, as the used car market is worth more than $840 billion annually. In the company’s Q4 report, Shift’s first as a publicly traded entity, it reported strong year-over-year growth in revenues and units sold. For the quarter, revenues reached $73.4 million, company record and 168% higher than the previous year. Shift sold 4,666 units during the quarter, a 147% yoy increase. For the full year, the revenue of $195.7 million represented an 18% yoy gain, while the total units sold reached 13,135, also up 18%. The sale numbers skewed heavily toward e-commerce, which made up 9,497 units of the year’s total sales. Shift has attracted attention from Benchmark’s 5-star analyst Michael Ward, who sees a higher level of conviction for growth in 2021 and 2022. “[In] our view, positive trends with revenue per unit and cost performance in early-2021 have set the company on a positive path… and given the recent pullback in the stock, view it as a favorable time to Buy. The used vehicle market in the US is a $1 trillion revenue opportunity, pricing has increased on double-digit rates since mid-2020 and given the pricing/inventory trends in the new vehicle market, we expect the positive pricing environment to continue into the second half of 2021,” Ward opined. In line with his upbeat outlook, Ward rates Shift shares a Buy, and his $13 price target suggests a one-year upside of ~74%. (To view Ward’s track record, click here) Wall Street tends to agree with Ward’s confidence on the automotive e-commerce firm, considering TipRanks analytics reveal SFT as a Strong Buy. Shares in SFT are selling for $7.45 each, and the average target of $13.50 indicates a possible upside of ~81% by year’s end. (See SFT stock analysis on TipRanks) Casper Sleep (CSPR) The next stock we’re looking at, Casper Sleep, is a $290 million company in the bedding business. Specifically, the company sells mattresses, pillows, bedframes, and bedding – household items that everyone needs. Casper operates mainly online, but has showrooms as well. The NYC-based company has seen earnings rise in 2H20, with Q4’s top line reaching the highest level the company has seen since it went public in February of 2020. That top line was $150.3 million, up more than 18% year-over-year. Full year revenue reached $497 million, for a 13% yoy gain. It’s important to note that these gains came after the company’s announcement, in the third quarter, of agreements with four large retailers to carry Casper products. Ashley HomeStore, Denver Mattress, Mathis Brothers, and Sam’s Club all began to carry Casper Sleep bedding, giving the company a high profile among the country’s largest mattress retailers. Covering Casper for Piper Sandler, analyst Robert Friedner set an Overweight (i.e. Buy) rating and a $12 price target that indicates room for 70% share appreciation from the current $7.04 share price. (To view Friedner’s track record, click here) “CSPR has bounced back from the challenged Q3 that saw supply chain delays negatively impact sales. The company appears to be operating at a higher level going into 2021, as it has diversified its supplier base and is showing steady progress on posting positive EBITDA in 2H 2021. With sales growth rebounding, new products rolling out in 2021, and easy compares ahead, we believe the sales multiple for CSPR… will continue to expand,” Friedner noted. In general, the rest of the Street has an optimistic view of CSPR. The stock’s Strong Buy status comes from the 3 Buys and 1 Hold issued over the previous three months. The upside potential lands at 63%, slightly below Friedner’s forecast. (See CSPR stock analysis on TipRanks) Intellicheck Mobilisia (IDN) The proliferation of online commerce – and the general increase in virtual interactions via the web – has boosted demand for tech security. Intellicheck operates in that sphere, offering a suite of SaaS products based on a propriety ID validation platform. Intellicheck boasts a high-profile customer base, including 5 top financial institutions and over 50 law enforcement agencies. Intellicheck also has a strong presence in the retail industry, where its ID validation is used to authenticate customer photo identification documents. The pandemic – which slammed brick-and-mortar retail – was hard on the company, but the economic reopening has seen business expand. The company saw its record revenue – $3.12 million – in the first quarter of 2020, right before taking a heavy hit at the beginning of the coronavirus crisis. Sales and revenues bounced back, however, and Intellicheck’s Q4 top line of $3.08 million, was only 1.2% off that peak – and up 6% from 4Q19. The company’s SaaS revenue grew 18% yoy, and 23% sequentially. More importantly, the company recorded positive EPS in Q4, with earnings coming in at 7 cents per share. This compared favorably to the break-even result in Q3, and the 5-cent per share loss in Q2. These facts lie behind 5-star analyst Scott Buck’s optimistic view of the company. In his coverage for H.C. Wainwright, Buck sees Intellicheck holding a strong position for long-term growth. “[As] several large states have begun to ease COVID-19 related restrictions and younger people have been, or can be, vaccinated at this time, we expect same-store scans to show improvement through the remainder of 2021…. New implementations are expected to include additional retailers as well as more traditional financial service providers and potential new markets such as healthcare, real estate, and standardized testing. While new customers are unlikely to have a meaningful impact on the quarter’s results, they will provide incremental revenue over the next 12 months,” Buck wrote. The analyst summed up, “With additional sales hires, we believe the company will again be positioned to complete between 30 and 40 software implementations during 2021 driving meaningful revenue growth into 2022.” To this end, Buck puts a Buy rating on IDN, and his $18 price target implies an upside potential of 113% for the year ahead. (To watch Buck’s track record, click here) All in all, Intellicheck’s Strong Buy consensus rating is unanimous, based on 3 recent positive reviews. The stock has an average price target of $14.83, suggesting a 75% one-year upside for the current price of $8.45. (See IDN stock analysis on TipRanks) To find good ideas for small-cap stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Andrew Franzone, a former race car team owner and an investment adviser of FF Fund Management, LLC (FFM), is facing fraud charges filed by the Securities and Exchange Commission (SEC).
In its complaint, the SEC alleged that Franzone and FFM defrauded multimillion dollars from investors who acquired limited partnership interests in FF Fund I LP, a private fund managed by the defendants.
Misrepresentations regarding a private fund sold to investors
According to the Commission, Franzone, the sole owner, and officer of FFM, made false representations and omitted material facts about FF Fund’s investment strategy, valuation, and performance.

Additionally, the SEC alleged that Franzone and his firm did not remove or disclose serious conflicts of interests. He also lied that the private fund will be audited every year.
The defendants falsely told investors that FF Fund will maintain a highly liquid portfolio primarily focused on options and preferred stock trading. In reality, Franzone and FFM allegedly invested in illiquid investments such as private start-ups, early-stage companies, and real estate ventures by the end of 2014. Franzone’s friends and associates started some of these companies/ventures.

The defendants continued to promote the private fund as a primarily liquid investment even if its investment strategy has been changed.
Franzone and FFM made the misrepresentations in FF Fund’s private placement memorandum (PPM) from December 2014 to June 2018.
During the relevant period, the defendants allegedly raised more than $38 million from approximately 90 investors.
Franzone and his firm allegedly violated securities laws
Furthermore, the SEC alleged that Franzone misused and misappropriated fund assets for his personal interests. He allegedly purchased a garage to store his private race car collection and pledged fund assets to secure loans for personal benefits.
On September 24, 2019, FF Fund filed for Chapter 11 bankruptcy in the Southern District of Florida. The private fund had no investments in liquid securities. It had only investments in four hedge funds that were liquidated for a total of $175,000, according to the SEC based on information from the Chief Restructuring Officer appointed in the bankruptcy.

In a statement, Adam S. Aderton, Co-Chief of the SEC Enforcement Division’s Asset Management Unit, said, “Investment advisers must provide honest representations to investors, disclose or eliminate conflicts of interest with clients, and not abuse client assets. e allege that Franzone and FFM violated federal securities laws by breaching these fundamental obligations.”
Meanwhile, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Franzone.
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Tom Burroughes, Group Editor , 26 April 2021

Senior private banking figures who regularly comment about family offices argue that calls to regulate FOs in the wake of the Archegos blow-up are misguided and could do more harm than good.
(A version of this article appeared last Friday our sister publication Family Wealth Report. The topic mainly applies to the US, but as other jurisdictions have often copied the lead of Washington DC in regulating areas such as financial centres, the issues here are highly relevant. The ripples from the Archegos affair have hit markets around the world, and affected a number of international banks.)
Regulators and other policymakers thinking of targeting family offices after the Archegos meltdown may have legitimate worries about this affair, but it is wrong to pillory the family office sector, and the risks arise elsewhere, senior figures in the sector say.
In early April, Dan M Berkovitz, commissioner, at the Commodity Futures Trading Commission, called for tighter regulatory oversight of family offices. Berkovitz said: “Unfortunately, in the last two years the CFTC has loosened its oversight of family offices. In 2019, and again in 2020, the Commodity Futures Trading Commission (CFTC) approved rules that exempted family offices from some of our most basic requirements.” He claimed that he had objected to the change.
With Gary Gensler taking up his post as new boss of the Securities and Exchange Commission, all eyes will be on what regulators might do.
Under the Joe Biden administration – expected to hike taxes on the wealthy – and a Democrat-controlled Congress, there are fears in the wealth industry about the position of family offices. The industry, depending on various estimates, oversees a global total of as much as $6 trillion in assets. (Exact figures are hard to pin down.) In the Archegos case, the business, which was a New York-based hedge fund run by Bill Hwang, did not manage third-party money, and was structured as a family office. As a result, it avoided regulatory oversight from the SEC. In 2019 the CTFC took a similar stance – family offices don’t have to register as commodity pool operators (CPOs) or provide an annual notice to this effect. 
A few hedge fund tycoons, such as George Soros and Steve Cohen, had morphed their firms into family offices over the past decade, albeit for different reasons.
Regulating family offices, rather than the individuals who take their decisions and the banks’ lending to them, will be a grave mistake; it will undermine the positive value family offices have in encouraging the use of patient capital, transferring wealth responsibly down the generations and steering philanthropy, Bill Woodson, executive vice president at Boston Private, and leader of its Family Enterprise Services Group, said in a recent note. (He co-authored that note with Richard Perez, a managing director and chief strategist at Boston Private.)
“We believe the concerns expressed by Commissioner Berkovitz, while understandable in that they convey shared disbelief and outrage that this happened, do not accurately depict family offices, the role they play in capital markets, the merits of the regulatory exemptions granted to them, or, indeed, their importance to wealthy families and, by extension, society,” Woodson and Perez said. 
“Much reference has been made to the exemption family offices received from registration as an investment advisor following the 2008 to 2009 financial crisis and the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act,” Woodson and Perez continued. “It is, however, important to note that the exemption for family offices from the Dodd-Frank reforms was not because they differ from hedge funds in terms of the magnitude of wealth they control or their trading sophistication. Instead, it was because they, for the most part, do not manage money for anyone other than family members or senior family office executives. And those family offices that do manage money for unrelated third parties must register as investment advisors and/or CPOs.”
Alastair Graham, who founded and runs the UK-based Highworth Research database on single family offices, had told this publication a few weeks ago that the vast majority of family offices don’t engage in the kind of highly leveraged trades of Hwang at Archegos, and that such entities tend to be lenders of credit, rather than takers of it. They tend to be relatively conservative in their investment time horizons, he said. (This is often, in fact, why family offices are targeted by private capital markets operators, because they tend to invest in terms of decades.)
The issue of whether an Archegos-type meltdown brings systemic risk is not an easy one to resolve. Some regulators still recall the Federal Reserve-led rescue of Long Term Capital Management (LTCM) in 1998. That firm had lost billions of capital via what turned out to be wrong-way bets on equities and bond markets. In the Archegos affair, Credit Suisse, Nomura and a number of other banks, including Goldman Sachs, Morgan Stanley, Citigroup, BNP Paribas, Deutsche Bank and UBS have been hit. At Credit Suisse, several C-suite figures, including its risk chief officer, have left and been replaced.
Where the problem liesIn the remainder of their note, Woodson and Perez wrote: “The fact that Archegos was a family office should not be a factor in whether the investing activities of Mr Hwang should be more closely scrutinised and regulated. Family offices are simply extensions of private individuals which, in this case, played a conduit managerial function for a private individual over his own money.”
They cited the arguments of Howard Fisher, a former SEC senior trial counsel, claiming that focusing on family offices, a distinct form of investing enterprise aside from the private individuals who use them, is to “miss the forest from the trees.”
“Mr Hwang could just as easily have made his large bets in his own name, rather than through his wholly-owned family office management company. In this case, shouldn’t the outcry be against him, the individual, instead of the entity through which he conducted his activities?” they continued. 
“If so, then the focus is not on the entity through which individuals invest their own money, but instead on the systematic risk these large, individual or family, investors pose on others in the securities markets and banking system. The question, then, should be how much risk a private individual should be allowed to take with his or her own money. Or, what mechanisms exist, or should exist, to monitor these exposures as they pertain to public companies. Individual investors take large bets with their own money in both private and public companies,” they wrote.
The authors said that there are already a number of regulatory programmes in place to monitor these bets to help investors and financial services firms avoid or mitigate any systematic risks a large investor might pose, including SEC Schedule 13D, which must be filed once an investor acquires 5 per cent or more in a public company, and SEC Section 16 which requires additional disclosures from officers, directors and 10 per cent shareholders of public companies.
“Regulators are certain to focus on the actors in this tragedy, including Mr Hwang, the prime brokers (who, according to public reporting, failed to accurately assess the total amount of leverage associated with these positions), and the swap mechanisms that were used to obtain high levels of credit. However, the culprits in this tragedy are the actors themselves, not the family office entity through which their actions were conducted,” Woodson and Perez added.
(Editor’s note: in the current environment, it appears that the family offices industry must continue to educate legislators – to the extent that is achievable – about what family offices are and where the risks truly lie. As we saw in the aftermath of the 2008 financial crash, while some valuable changes and lessons were learned, the dangers of leverage, “too-big-to-fail”, conflicts of interest and regulatory arbitrage remain. In the end, if people are risking their own money and not that of others, then if they make big errors, the lessons should be salutary. It is not the job, arguably, of legislators to save people from the results of their own foolishness unless there’s a danger of systemic risk.

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PHILIPPINE STAR/ MICHAEL VARCAS
By Keren Concepcion G. Valmonte
SHAREHOLDERS who own at least 10% of a publicly listed company’s outstanding capital stock for at least a year can call for a special stockholders’ meeting, according to new guidelines issued by the Securities and Exchange Commission (SEC).
In Memorandum Circular No. 7, the SEC said the new rules on the calling of special stockholders’ meetings aim “to promote good corporate governance and the protection of minority investors.”
Timson Securities, Inc. trader Darren Blaine T. Pangan said the new rules “somehow give minority investors a voice that can be heard by the controlling or major stockholders.”
Under the rules, any number of shareholders that hold at least 10% of outstanding shares of a publicly listed company have the right to call for a special stockholders’ meeting, whether in-person or through remote communication.
The shareholders should have held the shares for at least one year. They should send a written call for a special stockholder’s meeting to the board of directors through the corporate secretary at least 45 days before the proposed meeting date.
The document should include names of the qualifying stockholders and the percentage of shares they own respectively; purpose and agenda of the meeting; and proposed time and date.
The special meeting should not be scheduled within 60 days from the previous meeting of a similar nature, which also had the same agenda unless the company’s by-laws allow this. Otherwise, approval from the company’s board of directors will be needed.
The board of directors may also set the special meeting at an earlier date, “if it determines that the matters raised by the qualifying shareholders necessitate a quick resolution to prevent undue damage to the company,” the SEC said.
However, the agenda of the special stockholder’s meeting should not include the removal of a board director and issues that have already been resolved with finality in previous meetings.
If the stockholders’ request for the special meeting does not meet the requirements or is proven to be acted upon in bad faith, the board of directors will have to inform the requesting stockholders within 20 days from receiving the request that the call for a meeting was denied due to their noncompliance.
If the requirements are all met, the company’s board of directors must issue a notice to convene the special stockholders’ meeting at least a week before it is scheduled.
“Delay in the processing of such requests shall be equivalent to refusal if the delay is solely caused by negligence on the part of the corporation,” the SEC said.
Summit Securities, Inc. President Harry G. Liu said the new order is “a good move” to make management more conscious of running listed companies properly, as well as protect investors.
“I always believe that all the shareholders, whether small or big, [are] very important,” Mr. Liu said on a phone call on Sunday.
“If there’s a legitimate reason for the minority to be of concern and the [board] thinks it’s a proper concern, I think it’s but due for the company to hear [them] out,” he added.
Any company executive who denies qualified shareholders their right to call for a meeting may face fines, a permanent cease and desist order, possible suspension or revocation of the corporation’s certificate of incorporation, and dissolution and forfeiture of assets.

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By Obas Esiedesa – ABUJA
The Securities and Exchange Commission, SEC, has again urged investors in the capital market to register for e-dividend, explaining that doing so would allow investors derive maximum benefits from their investments in the capital market.

A statement by the Commission in Abuja on Sunday said its Executive Commissioner, Operations, Mr Dayo Obisan stated this during an interview.
SEC explained that e-Dividend is the process of paying dividends due to shareholders through a direct credit into their chosen bank account electronically rather than the issuance of dividend warrant through the postal system.
According to the SEC, Obisan noted that the registration is necessary to reduce the unclaimed dividends profile as well as increase liquidity in the capital market and the economy.
He disclosed that the e-dividend mandate forms are available on the websites of the SEC, registrars and even in some banking halls and therefore enjoined investors to download the forms, fill them out and submit to be mandated for e-dividend.
He said: “The forms are readily available on the SEC website, the registrars also have the forms on their websites, even some banks have them in their banking halls. We therefore enjoin investors to download the forms, fill them out and submit, if they have any problems, they can readily reach the SEC through our various contacts.
“Once we receive such complaints, we will be able to put them in the right part of what to do to ensure they are mandated for e-dividend.
“Remember that they are not only going to receive their current dividend. Once they are successfully mandated, past dividends will be paid as well. We want investors to be able to get the benefits of their investments as that would also help to attract more investors to the market as well as deepen the market.
Obisan also said it is the quest by the Commission to protect investors that necessitated the directive on Know Your Customer Update to Capital Market Operators.
The SEC recently reminded Capital Market Operators of the Commission’s directives on update of investors’ Know Your Customer information which it said is still in effect describing the exercise as critical to deepening the participation of retail investors and therefore directed all CMOs to accord it the highest level of priority.
According to Obisan, “It is quite important to let the public know that all these details the Commission is requesting them to complete is for their own benefit. As a regulator, yours is to create an enabling environment and to protect the investor, and you can only direct the operators i.e. the registrars, brokers or every other person that falls under your regulation to ensure that they don’t frustrate that process which is why at the Capital Market Committee meeting, one of the resolutions was that any operator that actually frustrates the unclaimed dividend process will be heavily sanctioned.
“In a couple of weeks we will start seeing some vivid steps taken towards that direction because these are benefits directly attributed to people that have carved out of their income and decided to invest in the capital market. They must directly get the benefit of that investment. Every person’s activity must be seen to complement the effort of the regulator to ensure that they reap the fruit of their own labour.

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FREEPIK
THE Securities and Exchange Commission (SEC) is asking interested parties to comment on its proposals for changes in the SEC Oversight Assurance Review (SOAR) inspection program, which was revised to align with the International Forum of Independent Audit Regulators’ guide on audit regulation.
“SOAR Inspections are intended to enhance the quality of audits of the financial statements of publicly-listed companies,” the SEC said.
The program is an initiative of the corporate regulator to do on-site reviews of accredited audit firms auditing listed companies in the Philippine Stock Exchange and the Philippine Dealing & Exchange Corp.
“For instances of extraordinary events which necessitate the flexibility on the manner of inspection… the Inspection Team, upon coordination with the firm, may perform remote or virtual inspection for a period of at least three weeks,” the commission said.
The commission plans to choose more than one of the company’s issuer audits for review.
“Our selection of audits for review does not constitute a representative sample of the firm’s total population of issuer audits,” the SEC said.
The SEC plans to add deputy inspection team leaders to the SOAR’s inspection team. An evaluation report of the firm’s remediation based on the team’s inspection will need to be approved by the commission en banc before it is given to the inspected firm.
Inspections will be done at the engagement-level and at the firm-level.
Company policies and procedures should align with the system on quality control under the redrafted Philippine Standards on Quality Control (PSQC) 1 or any of its amendments, Quality Control for Firms that Perform Audits and Reviews of Financial Statements or its amendments, and the firm’s documentation should be deemed sufficient.
Additionally, the commission will look to the redrafted Philippine Standards on Auditing 220 or its amendments.
The commission will notify the firm with details and purpose of the inspection at least 60 calendar days before it begins. Meanwhile, the firm of the selected audit engagement will be given at least 15 days before the inspection.
The audit team is responsible for preparing the following documents to the inspection team on the first day of inspection: completed Engagement Information Form, background about the firm, proof of archiving and certification from the managing partner and engagement partner that the engagement work papers provided to the inspection team are the original final version.
“The frequency of inspection shall be based on the relative size of the audited publicly-listed companies in terms of market capitalization,” the SEC said.
For firms with a client portfolio of 10% or more of the total market capitalization of publicly listed companies, inspections would be conducted once every two years. Meanwhile, those with less than 10% will be inspected once every three years.
However, the commission may order more inspections on firms should it deem necessary.
Findings of the inspection team may be classified as either opportunities for improvements or for enhancements or as significant deficiencies.
“Firms may request for another discussion with the Inspection Team, after the status meeting, but before the issuance of the LOF (Letter of Findings), to further clarify matters that were raised during the status meeting,” the commission said. 
The LOF will be serving as the basis in preparing the SOAR inspection report. Firms being expected may request to extend until 15 days the time given to reply to the LOF or the SOAR inspection report.
The proposed amendments for the SOAR inspection program also adds instructions for the remediation process, evaluation of remedial actions, as well as guidelines in case there are contested findings.
Actions may be published on the SEC website within 30 calendar days after the evaluation report of the firm’s remediation.
“The commission shall issue and publish an Annual Inspection Report which aims to provide the public with insights on observations noted during SOAR inspections,” the SEC said.
Revisions are proposed to further protect public interest and investors, and those who use a company’s audited financial statements.
“The revised rules on the frequency of inspection shall apply to firms that will be inspected starting year 2022,” the commission proposed. — Keren Concepcion G.

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@howardmarksHoward Marks
Co-founder of Activision & co-founder and CEO of StartEngine

On March 11th, Beeple became the third highest paid living artist with a $69M sale of one of his works as an NFT, a non-fungible token on the blockchain. This sale is one of many at the front of NFTs, blockchain’s latest hype machine of digital collectibles. Entire marketplaces have emerged to facilitate the sale of NFTs, but what if one of the most popular NFT marketplaces is breaking securities laws?
I have written many articles on Initial Coin Offerings (ICOs) back in the day, sometimes trolling the very concept of an ICO, because it was so obvious they were offering securities under the guise of being a simple token and taking money from unsuspecting investors. We all know how that story ended. $14B in investor dollars vanished into the ether(eum), a blockchain black hole, and many companies that raised funding through an ICO were later fined for the unregistered sale of securities.
What are NFTs?
The new superstar today is NFTs (non-fungible tokens). These are smart contracts on the Ethereum blockchain that first began as a modern twist of Tamagotchi in the form of CryptoKitties as well as collectibles (think digital baseball cards).
Today, the idea of what can be sold as an NFT is rapidly evolving. Living painters are selling their art as NFTs. Musicians are selling unique compositions as NFTs. Jack Dorsey, the founder & CEO of Twitter, sold his first tweet as an NFT for $2.9M (to Dorsey’s credit, the proceeds went to charity).
Millions of dollars are being spent and traded. Are those people who buy NFTs collectors or investors? Who is really selling these NFT and profiting from it?
Unpacking these questions of the NFT hype machine are important to answer in order to determine whether NFTs are securities. If they are, all of those NFT promoters and artists are committing a securities violation. That spells trouble with the Securities and Exchange Commission (SEC). The regulators, which include the SEC, the Treasury and all 50 State Administrators, would not be too happy to learn that people are receiving millions of dollars for the sale of unregistered securities.
What are securities?
But let’s start from the beginning. What is a security, and why is this important? Luckily for us, there is a Supreme Court precedent and a test to determine whether something is a security. This test is called the Howey Test, and how it works is simple. A transaction just needs to meet these requirements:
A person invests their money in a common enterprise.
The person is led to expect profits. 
That expectation came solely from the efforts of the promoter or a third party
Pretty simple in theory. However, add what the regulators like to call “facts and circumstances” to this formula. Now the issue gets complicated and begs the interpretation of experts in the world of securities.
So let’s peel the onion and see where it takes us.
1. A person invests their money in a common enterprise.
An NFT is not a common enterprise. It is actually a piece of code on a blockchain called a smart contract. However, it is sold by a common enterprise to investors.
Take for example Nifty Gateway, which sells artwork pieced into many NFTs, and each NFT represents the same piece of artwork. This artwork is also available to anyone to download and use. However, only those who own one of the NFTs sold can actually claim ownership of this artwork.
In other words, Nifty Gateway, a common enterprise, created the NFTs, decided on the number of NFTs to sell, and then offered them for sale on their website for a very limited period of time with a countdown timer to create buyer’s FOMO  (Fear Of Missing Out). Feels like a high-pressure penny stock offering to me.
2. The person is led to expect profits.
The second question is whether buyers are led to expect profits. At least for now, it seems Nifty Gateway is packaging these NFTs as an investment that can appreciate, promising artists and collectors that there will be a value increase. How would the company know this? 
They list the price someone paid, and then the price the next buyer paid to purchase it from the original buyer, always for more money. Nifty runs the secondary marketplace, thus creating liquidity and expectation of profits from the buyers.
To add complexity to this story, the artist actually gets a slice of every transaction, which also could be called a royalty. This royalty is permanent and paid via the smart contract. You could argue that the royalty does not make the NFT a security because no person is paying that royalty, the smart contract is.
However, the smart contract was created by a common enterprise, Nifty Gateway. The collector does not own the NFT outright; they own an interest in the digital artwork and do not really own it because they own royalty in perpetuity. Therefore, it appears to be an investment contract, which supports the idea that the Nifty Gateway NFT is a security.
If it looks like a duck and quacks like a duck…
3. The expectation of profit came solely from the efforts of a promoter or third party.
The final question is whether the expectation of profit comes solely from the promoter, which is in this case Nifty Gateway. Let’s recap.
Nifty Gateway finds an artist and signs them up to drop pieces of digital artwork on Nifty’s website. Nifty takes the artwork and creates NFTs of it, paying the artist a commission. Then, once the NFT is sold to a collector, Nifty handles the secondary market on its website to facilitate the NFT being traded between collectors and shows the price climbing over time.
All the while, the artist gets royalties on every transaction from the beginning until the end of the universe. Or whenever the immutable blockchain becomes mutable.
To add to this, you are seeing celebrities promote NFTs, such as Elon Musk who offered his musical NFT artwork for auction to the highest bidder. But then, after getting a call from his lawyer, retracted the auction. Sound familiar to when the SEC fined boxer Floyd Mayweather and musician DJ Khaled for promoting ICOs?
What is the antidote?  NFTs can be sold using a Reg A+ (no trading restriction) or Reg Crowdfunding offering (with 1-year trading restriction) and then traded on an Alternative Trading System (ATS) operated by a broker-dealer.
Despite the promise of blockchain’s capabilities, it shows signs of one of humanity’s oldest lessons: history repeats itself.

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Shareholders approve go-public merger with Lightning eMotors
Loveland-based Lightning eMotors is one step closer to becoming a publicly listed company after shareholders in a special purpose acquisition company approved a merger between the two companies.
Approximately 98% of GigCapital 3 shareholders who participated in a special meeting Wednesday voted to approve the company’s merging with the maker of drivetrains for nonpassenger electric vehicles, according to a filing with the U.S. Securities and Exchange Commission on Thursday morning.
SPACs are shell companies that are listed on public exchanges and are later merged with companies looking to go public outside of the normal procedures of an initial public offering. That method of taking a private company onto an exchange soared in popularity last year.
Once the deal is consummated, Lightning will trade on the New York Stock Exchange under the ticker symbol ZEV. At the time of the deal’s announcement last December, Lightning eMotors was valued at $823 million.

The company expects to add up to $270 million in cash to its books through the deal, which it plans to use to fuel an audacious growth strategy.
The latest filings to the U.S. Securities and Exchange Commission show that Lightning expects to go from generating about $9 million in revenue in 2020 to $63 million in 2021 and grow exponentially to $2 billion in sales and a gross margin of 26% by 2025.
WeldWerks confirms restart of October beer festival
WeldWerks Brewing of Greeley will hold its WeldWerks Invitational beer festival in person in October, taking a direction opposite of the Great American Beer Festival in Denver.
The brewery said Monday that it will invite representatives from 45 craft breweries across the U.S. to restart the annual competition that began in 2018 but was canceled in 2020 due to the pandemic.
WeldWerks said it will continue to monitor COVID-19 guidelines and trends in the months leading up to the Oct. 30 festival. A full set of safety guidelines is set to be determined once tickets are put on sale.

WeldWerks announced plans for the in-person event days after the Brewers Association said it would hold the Great American Beer Festival virtually for the second year in a row out of an abundance of caution.
BBB names Torch Award for Ethics winners
Three businesses and one nonprofit organization from Northern Colorado and Wyoming have been named recipients of the 2021 BBB Torch Awards for Ethics by the Better Business Bureau Foundation Serving Northern Colorado and Wyoming.
The virtual celebration was held Thursday and included recognition of the second class of BBB ethics scholar interns, and the announcement of this year’s Torch Award for Ethics winners.
Torch winners in the business category were:
• Blue Federal Credit Union, headquartered in Cheyenne with branch locations along the Front Range of Colorado.
• Coffey Engineering and Surveying, headquartered in Laramie with an office in Loveland.
• Spine and Injury Clinic of Laramie
The nonprofit winner was Animal Friends Alliance, which has two locations in Fort Collins.Nominations for the 2022 BBB Torch Awards are now open, and the nomination form is available at bit.ly/2QkSrIB. The deadline to nominate an organization is July 9, 2021.
In Brief
• Tolmar Pharmaceuticals of Fort Collins has won a federal contract award for $63,837,600 from the Department of Veterans Affairs in Hines, Ill., for drugs and biologicals.
• Dr. Davis Blanton of UCHealth Family Medicine Center partnered with Surgery Center of Fort Collins on March 11 to host a daylong event to perform colonoscopies on 12 patients from underserved Northern Colorado communities. Dr. Julio Salimbeni served as anesthesiologist, and Summit Pathology in Loveland donated its services to review findings.
• The 87 Runza restaurants, including one in Loveland, raised $40,139 during the Nebraska-based company’s Runza Feeds the Need fundraiser April 13. The money will benefit hunger-related organizations, including KidsPak in Loveland.
People
Ashley Imburgia
• Ashley Imburgia, a doctor of psychology, has joined Banner MD Anderson Cancer Center at McKee Medical Center in Loveland and North Colorado Medical Center in Greeley to help with the range of emotions that can come with a cancer diagnosis and to support a patient’s physical cancer care. Psycho-oncology provides personalized behavioral medicine and support interventions to patients and their caregivers.
• Tyler Smith, owner of Bear Naked Hot Tub Co. in Loveland and Mountain Mist Pool & Spa in Longmont, was featured as a model of best business marketing practices at Main Street America’s Main Street Now 2021 Conference, a virtual event April 12-14. He was part of a presentation by Destination Business expert Jon Schallert, “The Post-Covid Comeback: The New Requirements to Build a Destination Downtown.”
• Professional speaker Rebekah Shardy of Loveland has completed her second book, “Indivisible Nature, People, and Spirit.” According to a press release, the book “presents ways to overcome current social divisions through empathetic dialogue, a reciprocal relationship with Nature and fusion of one’s internal energies.” Shardy offers best practices from the Iroquois nation and early Celts. The book is available on Amazon. For more information, or to schedule a presentation, contact Shardy at 970-308-8393.
Send us your business news
The Reporter-Herald strives to include newsworthy business briefs for its readers each Sunday. The focus of business briefs is on Northern Colorado businesses, not business promotions.
The items we consider for briefs include:
• New businesses.• Business relocations.• Business closings.• New contracts.• Anniversaries (divisible by five).• Mergers and acquisitions.• New owners, employees or promotions of employees.• Manufacture of new products.• Business organization meetings, workshops, seminars or classes meant for networking or education.• Open houses related to newsworthy events (new business, anniversary, new owners, renovations, new management, etc.).• Awards or other recognition.• Donations to charities.• Earnings.
Press releases are welcome. The Reporter-Herald reserves the right to edit information submitted for publication. Pictures of individuals involved in the event are welcome, but publication is not guaranteed.
Information is due by noon Wednesday for publication in the following Sunday’s business section. Information can be emailed to [email protected]. For more information, contact Craig Young, 970-635-3634, [email protected].

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