SEC Charges 10 Microcap Companies for Violating Regulation A

The SEC today announced charges against 10 microcap companies for offering securities in unregistered offerings that failed to comply with Regulation A. This regulation provides a limited exemption from registration under the Securities Act which enables companies to raise money from the public as long as they meet specific requirements. The SEC's orders found that these companies had changeed their offerings inappropriately including increasing the amount of shares offered, changing the prices of the shares, failing to file updated financial statements annually, engaging in prohibited at-market offerings, and engaging in prohibited delayed offerings, thus all violating the offering registration provisions. As a result, each of the microcap companies agreed to pay civil penalties and cease any violations of Section 5 of the Securities Act. The SEC’s investigations were conducted by Som P. Dalal, Jen Peltz, Anne C. McKinley, M. Lance Jasper, Ansu N. Banerjee, and Ana D. Petrovic of their regional offices. Assistance was also provided by staff in the Division of Examinations and the Division of Corporation Finance.