: SEC charges 10 microcaps with securities-related violations

by | May 16, 2023 | Stock Market

The Securities and Exchange Commission has announced charges against 10 microcap companies for offering and selling securities in unregistered offerings that failed to comply with Regulation A. A limited exemption from registration for public offerings, Regulation A lets companies raise money from the public as long as they meet specific requirements.

“Between December 2019 and May 2022, each of the 10 microcap companies obtained qualification from the SEC for their securities offerings using Regulation A, but they subsequently made one or more significant changes to their offerings without meeting the requirements of the exemption,” the SEC said in a statement. The changes included improperly increasing the number of shares offered, improperly increasing or decreasing the price of shares offered, failing to file updated financial statements at least annually for ongoing offerings, engaging in prohibited at the market offerings or engaging in prohibited delayed offerings, according to the SEC. “Companies that choose to benefit from Regulation A as a cost-effective way to raise capital must meet its requirements,” Daniel Gregus, director of the SEC’s Chicago Regional Office, said in the statement. …

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