Recently, the Securities and Exchange Commission's Division of Corporation Finance issued a sample comment letter that provides guidance to issuers raising capital and that have volatile securities. The sample comment letter identifies a number of areas of risks that issuers and their advisers should consider under these circumstances, which would include periods during which there have been significant run-ups in the stock price, divergences in valuation ratios relative to those seen during traditional markets, high short interest, reported short squeezes, or reports of strong or atypical retail investor interest. Under such circumstances, an issuer should consider the sample comments raised in the letter, which, the Division notes, is not an exhaustive list, and tailor the disclosures to the issuer and the offering. For issuers that already have an effective shelf registration statement, the sample letter may provide a useful roadmap for disclosures to include in a prospectus supplement for a shelf takedown.
See the sample letter here.
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
