Integration Disintegration?

Author:Ms Anna Pinedo
Profession:Morrison & Foerster LLP

One of the thorniest issues for securities lawyers always has been addressing potential integration questions. We have been trained to recognize that there are heightened concerns associated with offerings occurring in close proximity to one another, or changes in offering format (from private to public or public to private offering). Over time, the SEC has provided increased certainty regarding integration issues by formulating and adopting various integration safe harbors. However, the capital markets evolve continually, and as we've noted in other posts, there is considerable "blurring" of the lines between the types of offering formats that are characterized as private placements and those that are characterized as public offerings. These hybrid offerings, like PIPE transactions, registered direct offerings, and confidentially marketed public offerings (or wall-crossed offerings), test the limits, and highlights the infirmities, of many integration principles. Now, we have the JOBS Act, which seems to stress further many of the basic integration ground rules. As a young securities lawyer, I was regularly reminded that an offering that starts as a private offering must be completed as a private offering, and, of course, the corollary, that an offering started as a public offering must be completed as a public offering. Will that continue to hold true? An emerging growth company may now engage in test-the-waters...

To continue reading