Archive for the ‘Risk Management’ Category

Securities Offerings on the Internet

Wednesday, March 19th, 2008

In the 1990s, my colleague, Lou Turilli,* and I wrote an article for The National Law Journal about how the Internet might shape securities offerings. I followed that up with an article for Wall Street Lawyer, Securities Offerings Online By Small, Nonpublic Businesses. It specifically focused on whether small companies could viably offer and sell securities on their own via the Internet. I concluded that, “Clearly, selling securities online is a viable concept. Yet until fundamental issues such as the problem of gaining visibility, the lack of secondary markets, the arbitrary pricing and the disinterest of established investment bankers each are addressed, the opportunity for small businesses to raise capital in cyberspace will hold great promise as an idea, but be of limited practicality in the real world.”

I don’t think that my conclusion has changed. Distribution and pricing remain key obstacles for companies that want to promote their own online offerings. Marketing the securities is still a serious issue, and there are credibility concerns for the companies as well. Thus, serious companies will continue to pursue the traditional route.

* Lou and I practiced law together at Day, Berry & Howard. She recently was Vice President and General Counsel of Ryerson.

Directors and Officers Liability Insurance

Wednesday, February 6th, 2008

Directors and Officers Liability Insurance, commonly referred to as “D&O insurance,” covers damages and defense costs if a company’s officers and/or directors are sued for wrongful acts that may have occurred while they were performing their corporate duties. It is payable to the corporation or the directors or officers themselves.

Wrongful acts may include errors, omissions, misstatements or misleading statements, breach of duty to the corporation or neglect. Plaintiffs may include just about anyone: shareholders, vendors, creditors, regulators, competitors, and employees.

D&O insurance used to only be available to larger, established corporations. In recent years, however, even small, private companies have been able to purchase D&O insurance. CarpenterMoore, a Nasdaq company, provides D&O liability insurance among its products.