Securities Regulation

With respect to easing registration requirements, the State Securities Board (“Board”) had the opportunity to lead both state and federal securities regulatory bodies through rule changes for finders -- those who assist issuers in finding purchasers. The Board also issued no-action letters for nonregistration of securities issued in connection with various reorganizations involving a Massachusetts business trust, a demutualization of an insurance company, and an exchange of private shares for public American Depository Receipts. Other than considering the availability of the in pari delicto defense for litigation-funding agreements, the courts generally avoided the interesting issues. Such issues include whether a seller's fraud tolls the statute of limitations under the Texas Securities Act (“TSA”) for securities fraud and whether the SEC has authority to ignore state statutes of liquidation when formulating disgorgement orders against perpetrators of securities fraud