Securities Law

Our Firm’s Awards
Our Address

Fillmore Spencer LLC

At Jamestown Square

3301 North University Avenue

Provo, Utah 84604

(801) 851-1266

Utah County Law Firm Represents Utah Companies and Investors in Securities and Disclosure Law

From public and private issuances and transactions to charges of fraud, breach of fiduciary duty and insider trading

For more than 30 years, Fillmore Spencer securities attorneys have helped companies, startups investors, brokers, investment advisors, and the officers, directors, partners and owners of corporations, limited liability companies (LLCs) and partnerships raise capital, effect mergers and acquisitions and make and defend securities claims. We also help parties respond to actions by government agencies like the Securities and Exchange Commission (SEC), the Commodities and Futures Trading Commission, the Utah Division of Securities (UDS), the Utah Division of Real Estate, the Utah Department of Financial Institutions and the Utah Department of Insurance.

Navigating federal regulations and the Utah Uniform Securities Act

Utah’s definition of securities includes shares, stocks, LLC interests, bonds, promissory notes, limited partnership interests and oil and gas partnerships. Utah and federal laws define a security as any transaction in which one person gives money or other value to another with the expectation of a profit in return, in effect an “investment contract.” These definitions of securities make almost all debt and capital raising subject to securities law compliance. Many companies are simply unaware of the significant implications of those laws.

Our securities lawyers advise clients on complying with the law, including:

 

  • Private placements
  • Private offering memos (PPMs) and other disclosure documents
  • Registration and filing compliance
  • Federal and state regulatory compliance and disclosure obligations
  • Sarbanes-Oxley rules and regulations
  • SEC investigations and proceedings
  • Broker-dealer disputes
  • Securities or anti-fraud litigation
  • Securities class actions
  • Utah Securities Division investigations and proceedings
  • Shareholder disputes
  • Breach of fiduciary duty
  • Insider trading

 

Our business law acumen includes securities law and law relating to business structure and mergers and acquisitions activities.

 

Counseling on the issuance of securities

  • Debt and equity financings — Fillmore Spencer LLC advises on SEC and Utah Division of Securities requirements for companies or other issuers selling debt or ownership in corporations, LLCs and other entities. With the exception of hedge funds, most securities are subject to federal law, including:
  • Securities listed or authorized for listing on the New York Stock Exchange, the American Stock Exchange and Nasdaq
  • Securities issued by an investment company such as a mutual fund, closed-end fund or unit investment trust registered with the SEC that has filed a registration statement under the Investment Company Act of 1940
  • Securities listed on Tier I of the Pacific Exchange, Tier I of the Philadelphia Stock Exchange and the Chicago Board Options Exchange.
  • Private placements — Private or limited placements of securities are offered by privately- and publicly-held companies. These are exempt from securities law registration requirements when offered under statutory exemptions or under either Rule 505 or Rule 506 of Regulation D. Though exempt, the sale of securities will still need to meet federal and state antifraud, full and fair disclosure, resale limitations and other requirements.

Rule 506 permits an issuer to raise an unlimited amount of capital from an unlimited number of accredited investors and up to 35 non-accredited investors who must be “sophisticated” investors. Purchasers must buy for investment only, and resale is restricted.

To minimize the risk that a Utah private placement will be deemed a public offering, Utah enterprises may rely on SEC Regulation D, Rule 505 as a “safe harbor.” Rule 505 permits a registration exemption for offers and sales of securities totaling up to $5 million over any 12-month period. Under this exemption, securities may be sold to an unlimited number of accredited investors and up to 35 unaccredited investors, but the latter do not need to satisfy sophistication standards. Purchasers must buy for investment only, and not for resale. The issued securities are restricted: investors may not sell for at least two years without registering the transaction.

A word about real estate securities in Utah

Real estate securities must be federally covered, registered or exempt and are treated like other securities: The seller must be licensed or exempt from license to sell the securities, the buyer must be given full disclosure of relevant information.

But what might be a real estate security elsewhere is not necessarily such in Utah. Under federal securities law and most states’ securities laws, when one person solicits another to purchase a “tenant-in-common” (TIC) interest in real estate, the interest is typically considered a security. Under Utah law, the buying and selling of TIC interests are not considered securities transactions.

 

The sale of TIC interests are regulated exclusively by Utah real estate law, which means Utah investors considering TIC interests likely will not be accorded protection by securities laws: Sellers are not required to be licensed, there is no requirement for full disclosure and the Utah Securities Division may not be able to pursue allegations of misconduct and fraud. However, the issuance of TIC interests will be subject to Utah real estate laws and licensure and could be subject to federal securities laws.

 

State regulators have seen problems with non-traded real estate investment trusts, properties that are bank owned, pending short sale, or in foreclosure, and flimsy promises of investment funds being secured by an interest in real property that is already highly leveraged and has no remaining equity. As with other securities activities, the counsel of a seasoned securities attorney is advised.

 

Securities disputes, fraud charges and regulatory issues

Fillmore Spencer LLC attorneys are versed in the resolution of securities disputes, whether by negotiation, arbitration or litigation, including litigation involving securities fraud.

Hire an experienced firm well-versed in the complexities of ever-changing securities laws

Fillmore Spencer LLC securities attorneys bring valuable insights to issuing securities and other transactions and work to ensure your company’s capital-raising efforts are not only effective but subject to low risk. Call us to arrange for an obligation-free consultation at (801) 851-1266 or contact us online.

Fillmore Spencer LLC is located in Provo, UT and serves clients in and around Eagle Mountain, Highland, Lindon, Orem, Provo, Pleasant Grove, Saratoga Springs, Springville, Elberta, American Fork, Wallsburg, Alpine, Mapleton, Midway, Lehi, Spanish Fork, Cedar Valley, Draper, Heber City, Payson, Salem, Goshen, Sandy, Santaquin, Riverton, Duchesne County, Juab County, Sanpete County, Summit County, Utah County, Uintah County and Wasatch County.