TagSEC

Capital Raising Prospects for Startups: India and US Compared

[The following guest post is contributed by Surya Kumar Gheda, a final year law student. The author can be contacted at [email protected]] Last week, two capital market regulators, the Securities Exchange Commission (SEC) in the United States (US) and the Securities Exchange Board of India (SEBI), have announced frameworks to enable startups to obtain easy access to capital through the...

Regulatory Steps Towards Public Offerings and Transparency

The Economic Times reports that SEBI has issued a circular which requires companies with less than 25% public float to raise funds through public offering of securities rather than through private placement to institutions, or QIPs. This is with a view to increasing the public holding in listed companies and to contain stock price manipulation. SEBI’s move comes close at the heels of its order on...

Should Shareholders Pay for Corporate Misconduct?

The U.S. SEC’s settlement last week with Citigroup has revived the debate about the efficacy of payments by way of settlements, fines and penalties by companies as a consequence of breaches of law. Under this settlement, Citigroup is required to pay $75 million for making “misleading statements about the extent of its holdings of assets backed by sub-prime mortgages in earnings calls and public...

SEC’s Restrictions on Short Selling in Melting Scrip

(The following post has been contributed by Ravichandra S. Hegde of J. Sagar Associates) The Securities and Exchange Commission (“SEC”) in February 2010 has amended Rule 201 of the SHO Regulations[1] framed under the Securities Exchange Act of 1934 (“Act”) restricting abusive short sale in the falling scrip thereby retaining investor confidence. The amendment effected to Rule 201 is primarily...

Powers of SEBI and SEC Compared

In his column in the Business Standard this week, our guest contributor Somasekhar Sundaresan argues that, if one were to go by the rule book, SEBI has greater powers than the SEC. He lists out several significant powers of SEBI that can be exercised without intervention of the court. Here are some excerpts: Take the Raj Rajaratnam case itself. The SEC has had to file a complaint before a court...

Corporate Frauds and Regulatory Shortcomings: SEC’s Madoff Report

A few days ago, the U.S. SEC’s Office of Inspector General (OIG) released a report (over 450 pages) identifying various lapses that led to SEC’s failure to uncover Madoff’s Ponzi scheme much earlier than December 2008 when the scandal broke out. To the interested reader, the executive summary might be more manageable given the length of the main report. The principal findings of SEC’s...

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