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For startup companies and other cash-strapped businesses, so-called “sweat equity” can be extremely beneficial... For startup companies and other cash-strapped businesses, so-called “sweat equity” can be extremely beneficial. While many startups are unable to reward founders and employees for their hard work with monetary compensation, they can award an equity interest in the company. What […]

While side letters can be helpful in securing key investments, it is imperative to fully understand their legal implications… Side letters are frequently used to enter into legal agreements between private funds and investors. They can be used to alter the terms of a limited partnership agreement or even override certain provisions. While side letters […]

A simple agreement for future equity (SAFE) isn’t always so simple... A simple agreement for future equity (SAFE) isn’t always so simple. Before startups and investors consider this increasingly popular security, it is important to understand how SAFEs work. To start, a SAFE is an agreement between an investor and a business in which the […]

The SEC is warning its registrants that they may be the target of sophisticated ransomware attacks... The Securities and Exchange Commission (SEC) is warning its registrants that they may be the target of sophisticated ransomware attacks. “The Office of Compliance Inspections and Examinations (OCIE) has observed an apparent increase in sophistication of ransomware attacks on […]

Effective as of January 1, 2020, investors can take advantage of New Jersey’s expanded Angel Investor Tax Credit Program… Effective as of January 1, 2020, investors can take advantage of New Jersey’s expanded Angel Investor Tax Credit Program. The program, which provides a tax credit for a percentage of an angel investor’s investment in a […]

The Securities and Exchange Commission Recently Adopted New Standards for Broker-Dealers and Investment Advisers The Securities and Exchange Commission (SEC) recently adopted new standards for broker-dealers and investment advisers. The centerpiece of the new rule is Regulation Best Interest, which enhances the quality and transparency of investors’ relationships with investment advisers (IAs) and broker-dealers (BDs) […]

New Jersey is Poised to Become the First State in the Country to Enact a Uniform Fiduciary Standard for All Financial Advisors… New Jersey is poised to become the first state in the country to enact a uniform fiduciary standard for all financial advisors, including both investment advisors and broker-dealers. The new rule proposal, N.J.A.C. 13:47A-6.4, […]

Investor Recourse for Initial Coin Offering Fraud With the price of Bitcoin rising and blockchain technology gaining increasing legitimacy, Initial Coin Offerings (ICOS) are gaining popularity with investors. However, as highlighted by two recent SEC enforcement actions, ICOs are extremely risky investments and in some cases, may be completely fraudulent. In such cases, private investors […]

In PLR 201725022, a corporation received rental income from its leasing of offices for medical and related services.  The taxpayer intended the rental income from its maintenance-related operations as non-passive investment income under section 1362(d)(3)(c)(i). In PLR 201725022, a corporation received rental income from its leasing of offices for medical and related services.  The taxpayer intended the rental […]

Protecting Older Investors from Predatory Financial Advisors Because they have amassed large retirement savings, older investors are frequent targets of investment fraud. After all, that’s where the money is. The cognitive decline that often accompanies the aging process can also make senior investors more vulnerable to exploitation. Financial Frauds Target Seniors Today, Americans over the […]

SEC Warns New Crowdfunding Securities Are Not SAFE The Securities and Exchange Commission (SEC) is keeping a close eye on the developing equity crowdfunding industry. The agency recently issued an Investor Bulletin regarding the risks associated with Simple Agreements for Future Equity (SAFE) crowdfunding securities, which are increasingly being used in equity crowdfunding campaigns. What […]

New SEC Guidance Legitimizes Robo-Advisers Investors increasingly seek to obtain investment advice online. Some even rely on computers to determine where to invest their money. The new online services allow individual investors to create and manage their investment accounts through a web portal or mobile application, sometimes with little or no interaction with a human […]