Coral Capital Partners looks at recent SEC enforcement actions involving wrap around agreements, which are being used by companies and stock distributors to illegally convert debt into free trading shares. This has been a common practice since the SEC revised Rule 144 back in early 2006. The complaints provide a very good explanation as to how these wrap around agreements work In the most recent action the SEC sought sanctions against the attorney who wrote the legal opinions allowing for the shares to be issued without restrictive legends via the exemption provided by Rule 144.
The SEC recently initiated litigation against the controlling shareholder of two (2) public companies for causing those companies to issue false and misleading press releases. In its complaint against this individual, the SEC claims that over a several month period of time, he caused the companies to issue press releases and other public disclosures containing false and misleading information. The SEC charges that during this period of time there was a suspicious increase in the trading volume and share prices of the companies in question.
The Securities Lawyers Deskbook, published by the University of Cincinnati College of Law, has been a standard for professional in the securities industry. The Securities Lawyers Deskbook is currently being updated. Coral Capital Partners has published links to the various sites and regulations previously available through the Securities Lawyers Deskbook. Our goal is to provide a comprehensive source of links and reference information for businesses and other members of the investment community. We will be periodically updating and expanding the information provided.