
Legal Guardrails for a Unicorn Crackdown
The SEC is undertaking an historic effort to redraw the boundary between public and private companies. After years of watching – and sometimes encouraging – the explosive growth in less tightly regulated private markets and the proliferation of so-called “unicorns,” the agency is now reclaiming jurisdiction.
A key arrow in the agency’s regulatory quiver is its authority under Exchange Act Section 12(g) to force private companies to “go public” when they reach a certain size. The provision requires any company whose shares are “held of record” by more than 2,000 persons to take on the obligations imposed by federal securities … Read more