As we know Rodman has also announced it is buying the OTC Bulletin Board from FINRA, which has not yet been completed. Not entirely sure yet how the two may or may not synergize.

The idea is to set up a method through which potential investors in shelf offerings can contact the company directly to buy shares rather than doing open market purchases which can get dicey.  Apparently everyone will be able to do business anywhere from their laptop or PDA. A company could also complete a buy-back program through DirectMarkets.

Are we moving to a world where offerors and offerees of stock all find each other without anyone in between? Will this be the Ameritrade of public offerings? I guess we will all watch and learn.

As we recall, Regulation A offers a simpler offering circular to be distributed as a way to complete an initial public offering. Let’s hope the final bill includes meaningful state “blue sky” law exemptions for Reg A offerings. Could this be one of the thing that happens during the Presidential “silly season”? I sure hope so.

In addition, the President called for “crowdfunding” to be easier to do (the SEC and Congress are both working on this), the creation of a so-called IPO “on-ramp” (a blue-ribbon Treasury panel recommended easing into financial disclosure requirements over a period of years and he supports it), and expanding the Small Business Investment Company (SBIC) program.

Besides the Regulation A reform, I wish we could expand the availability of short-form registration for public offerings to all public reporting companies, not just those with $75 million in market value. That would help a lot.

But some good stuff there. We’ll be talking about crowd funding and the on-ramp in future entries. That’s where a lot of the wonkish types are chattering these days.

1. I continue to wish that the SEC will finally remove the unduly burdensome Rule 144(i) restrictions on resale of unregistered shares of former shell companies if the company is not current in its SEC filings. Socking former shells with this overreaching draconian restriction forever is simply unfair.

2. I wish that the SEC will reverse the extremely ill-advised “seasoning requirements” limiting a post-reverse merger company’s ability to uplist to a major exchange before trading over-the-counter for one full fiscal year. In my view the problem it sought to address is nowhere near as serious or documented as believed, and the apparent solution does virtually nothing to even address the alleged problem. If not reverse it, provide an exemption from seasoning for an underwritten public offering of $15 million.

3. I wish that Congress passes the currently pending bills to reform Regulation A to permit $50 million to be raised and to preempt state regulation of these offerings. After that I wish that the SEC promptly implements its provisions. IPOs should be easier to do!

4. I wish that the SEC will begin to look at modernizing the nearly 20-year old Rule 419 which severely restricted public offerings by shell companies. If you limit the public offering to accredited investors, they should be able to be treated the same as if you created a shell with Form 10 and a reverse merger should be able to be completed without a time-consuming and burdensome SEC proxy filing. This would hopefully help bring an end to the fraudulent practice of taking a “real” company public then marketing it as a shell without disclosing this to the public.

5. I continue to wish that the SEC would eliminate Schedule 14f-1, an SEC filing by a shell that must be completed 10 days before closing a reverse merger in many cases. Or at least I wish they would eliminate it in situations where the stock of the public company is not trading, or where the sole stockholder is also the sole director and officer approving the transaction. This would be a big help in transactions. Frankly the filing and mailing serves no real purpose that I can discern in these situations.

6. I continue to wish that Cromwell Coulson and his team at OTC Markets, Inc. continue to provide platforms that encourage transparency and flexibility, and I wish my friends at Rodman & Renshaw all the best in their acquisition of the OTC Bulletin Board.

7. I wish that, even after imposition of the new seasoning requirements, Wall Street continues to see the benefits of working with clean Form 10 “virgin” shells as an option to consider whenever a company is going public for companies that plan to trade over-the-counter for a few years, or companies planning to raise at least $40 million in a subsequent public offering to uplist.

8. I wish that Congress and the SEC would take a fresh look at both the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2011 focusing on something that was not analyzed at the time of passage: the impact of these measures on smaller companies. Then hopefully appropriate scaling or exemptions can be applied where the costs of compliance strongly exceed the benefits.

9. I wish the SEC would consider exempting smaller reporting companies from the “detailed tagging” in XBRL that’s coming next year. Since XBRL is for the benefit of stock analysts, and very few such companies are covered by analysts, the extra cost serves very little benefit.

10. I wish there were a way for the dedicated and well-meaning SEC enforcement folks to have an opportunity to get to know some of the great small and microcap success stories, including great reverse mergers such as Cougar Biotechnology and others, so that their view of smaller companies is not tinged through the prism of the small percentage of wrongdoers who exist in all areas of Wall Street.

Sorry I don’t normally go on so long but it’s only once a year! Here’s to an awesome 2012 for us all.

I guess the real question is how extensive the criminal investigation is. Does it reach to service providers and others involved in transactions? We don’t know. It’s been quite awhile since the SEC announced its wide-ranging investigation into the microcap industry and the reverse merger world in particular and those doing Chinese deals specifically, and we really haven’t seen any cases brought, civil or criminal, other than one case against an accounting firm several years ago. I know, it takes time to develop cases, and I’m sure we should not view the lack of public action as meaning there is nothing coming. But if the statute of limitations on most of these claims will be five years, it looks like anything that happened before 2007 is now going to be hard for the investigators to reach, except in some cases where the statute can be extended.

What I do know is that “waiting for the other shoe to drop” from the government investigations does have an impact on getting deals done. Players have to have comfort they are dealing with investors, investment banks, accounting and law firms that are not likely to be targeted by the regulators. Hopefully this will come to a head, or not, sooner rather than later.

These “super” 8-Ks, as we dubbed them, were also effective immediately and, until about 6-8 months ago, sat unreviewed. Companies then filed Forms S-1, then received comments that also included a requirement to amend the super 8-K along with the S-1 to make them consistent. Kind of a pain actually.

More recently, as part of their stepped up oversight of reverse mergers, the SEC has taken to reviewing all super 8-Ks. Why is this good? Because by the time a post-merger registration is ready to go, many companies will already have been through 2-3 rounds of comments on the super 8-K. What does this mean? Registrations of either public offerings or public resales after these comments are dealt with that receive a very small number of comments indeed.

Did the SEC think those of us in RM land would complain about the super 8-K reviews? Probably. My vote: we welcome the reviews as a great early ability to receive and address SEC issues with a company’s disclosure even before it is ready to submit a registration for review. So I say, thanks SEC staff, keep ‘em coming!

“In US politics, the silly season is a period from early summer until the first week of October of election years. Primary elections are over at this time, but formal debates have not started and the general election is still many weeks away. Issues raised during this period are likely to be forgotten by the election, so candidates may rely on frivolous political posturing and hyperbole to get media attention and raise money.”

It seems to me this period has been extended unbearably to pretty much the entire election year. Congressional aides confide to me that anything that’s not passed by December of the year before the election probably won’t be taken up until after. There are a few exceptions for small things that go through to make them look like they are doing something. Otherwise no one wants to be on the hook for anything.

The US House is fully re-elected every 2 years. One third of the Senate also comes up as well. Add a Presidential election and well it’s just crazy time. Given all the positive initiatives sitting before the legislature to help smaller businesses improve their access to capital, maybe we could replace the Silly Season with the Sensible Season?? How about just slipping Reg A reform through folks, no? Just me talking.

The PCAOB feels strongly that it needs to be able to audit these accounting firms as it does everywhere else in the world. Until now, the Chinese regulators have been stating that to do so would violate various Chinese privacy laws. Indeed, Deloitte’s China folks have refused to respond to subpoenas in the Longtop Financial alleged fraud case for this reason.

The last planned meeting was put off, which was not a good sign. Now that the parties are meeting again, one would think this is better than not meeting.  Our regulators are getting a lot of heat from the US Congress to bring this issue to a head. Hopefully the parties can work to do so without anyone losing theirs…

Wall St. Firms: Thanks for staying with me for years folks at Credit Suisse, JP Morgan Chase, Deutsche Bank, Goldman Sachs, UBS, Jeffries & Co., Brown Brothers Harriman and Houlihan Lokey. New to being noticed as regular blogees this year are Blackstone Group, Oppenheimer & Co., Royal Bank of Canada, Canaccord Capital, Laidlaw Securities, ABN-Amro, Fidelity Investments, Leerink Swann, Mitsubishi Securities (USA), Charles Schwab, Wedbush Morgan and RBS Securities. Glad to have you guys aboard!

Academia: Probably the strongest up and coming group of visitors are those from the world of academia. Regulars again this year are from Harvard, Columbia, University of Pennsylvania, Georgetown, Stanford, Duke, NYU, Ohio State, Boston University, Fordham University and University of Colorado. But what’s amazing is the list of newbies who became regular this year from Yale, Dartmouth, Cornell, MIT, Oxford University, London Business School, University of Virginia, UCLA, Northwestern, University of Oregon, Missouri University, Georgia State, Pepperdine, Washington U., Erasmus, Holy Cross, Michigan State, University of Minnesota, Albert Einstein College of Medicine, Rutgers, Suffolk, University of California Irvine, Tulane, University of Michigan, University of Mississippi, USC, Boston College, Korea University, SUNY Stony Brook and Drexel. Go colleges!

Media: A real trend this year justifying a new category is news media, which is very cool. So Bloomberg is here, as well as Reuters, Dow Jones, Condenast Publications and NBC Universal all regulars.

Others: Welcome back Microsoft and LexisNexis and welcome new regulars from Johnson & Johnson and real estate firm CB Richard Ellis.

Thanks again for all your continued support. Also get ready as I will soon be announcing a new book deal for me, watch this space!!! Happy New Year to all and soon Happy Chinese New Year as applicable!

So let’s see who has been here in the last year (I only list those who have been here pretrty regularly):

The Regulators: Since the beginning we’ve been proud to see our friends at the Securities and Exchange Commission visiting regularly. FINRA is also here (guys, your network is still called the National Association of Securities Dealers!). We also have regular visits from Nasdaq, the NYSE Euronext, the Korean Stock Exchange, the Public Company Accounting Oversight Board (PCAOB), the US House of Representatives, the US Senate and the FDIC. Cool no? Just waiting to see when the White House will check in!

The Law Firms: In truth it appears the bulk of our visitors are from major law firms. And several of my more direct competitors are here, thanks for checking in but sorry no free plugs! We also see regularly visitors from (this is in no particular order but all in this sentence were also regulars last year):  Skadden Arps, Pillsbury Madison, Nixon Peabody, Kramer Levin, Haynes & Boone, Jones Day, Perkins Coie, Paul Hastings, Sidley & Austin, Foley Lardner, Davis Polk & Wardwell, Dechert Price, Wachtell Lipton, Gibson Dunn, Hodgson Russ, Duane Morris, O’Melveny & Myers, Cadwalader, Morgan Lewis, Holland & Knight, Shearman & Sterling, Bryan Cave, Carter Ledyard, Kirkland & Ellis, Lowenstein Sandler, Proskauer Rose, Seyfarth Shaw, Andrews & Kurth, Hale & Dorr, Mayer Brown, Paul Weiss, Fulbright & Jaworski, and McGuire Woods.

There are a whole bunch of new law firms that made the radar this year, here are some: Morrison & Foerster, Debevoise & Plimpton, Cooley Godward, Akerman Senterfitt, Patton Boggs, Fenwick & West, Kaye Scholer, Sonnenschein Nath & Rosenthal, Shepperd Mullin, Morgan Lewis, Ballard Spahr, Hogan & Hartson, King & Spalding, Covington & Burling, Cahill Gordon, Cleary Gottlieb, Simpson Thacher, Baker & McKenzie, Goodwin Procter, Orrick Herrington, Pitney Hardin, Venable Baetjer and Pepper Hamilton. Wow, and welcome all!

Accountants: Great to see KPMG, Ernst & Young, Price Waterhouse and BDO all here. I continue to wonder why more accountants and auditors don’t visit our friendly site!

In the next entry we hit Wall Street firms, academics and others.

Barron’s reports that a lawsuit was filed this past Thursday against Nasdaq by CleanTech Innovations (CTEK) which was delisted from Nasdaq over a year ago. The suit claims, essentially, that Nasdaq systematically sought to eliminate Chinese companies from the exchange for no other reason than where they came from. Apparently this case is being taken seriously, since the presiding judge in the case was quoted as saying, “Plaintiff raises serious allegations of discriminatory behavior by NASDAQ.”

The complaint alleges, according to Barron’s, “NASDAQ, in creating and carrying out a discriminatory policy directed exclusively at CleanTech as a China-based company, engaged in selective prosecution in clear violation of the United States Constitution and CleanTech’s equal protection rights. CleanTech now seeks a permanent injunction to prevent NASDAQ from engaging in racially discriminatory animus and damages against the defendants for acting outside of their protected sphere of immunity.”

The complaint further alleges that a senior Nasdaq official stated that, “[o]ver the past year, we’ve developed expansive procedures to use in reviewing just this type of company that go well beyond what we do with other applications.” A Nasdaq spokesman told Barron’s that the allegations are without merit.

Well, wow is all I can say for the moment. It will be fascinating to see how far this case is able to be taken. There is no question that the regulators and US exchanges have been put in a difficult position following the allegation of fraud in several dozen Chinese companies that went public in the US. Is it racist? I guess the courts are now being asked to weigh in. We’ll keep an eye on this one.