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Uncategorized - Help with mergers & acquisitions, raising capital, creating stock options and other equity plans

Archive for the ‘Uncategorized’ Category

Crowdfunding for a Cause

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Within the last few years, crowdfunding sites like Kickstarter have made it possible for young entrepreneurs to gain funding for their dreams. But with crowdfunding becoming an even more popular way to fund endeavors, the concept is shifting through other sectors.

Crowdfunding is now allowing individuals to capitalize and seize the opportunity to gain funding for personal and social causes including medical trust funds. These crowdfunding trends have allowed compassionate individuals the opportunity to directly fund life-changing procedures and plans.

For example, when the most recent Dark Knight film hit theatres, a gunman opened fire on an unsuspecting theatre full of movie goers. Among the injured was Farrah Soudani, a victim whose friends raised funds using the GoFundMe website to cover her medical expenses.

A $2,000 medical trust was set up in Soudani’s name and, thanks to the crowdfunding platform, nearly $7,000 was donated by complete strangers, part of the $170,000 total raised. The beauty of crowdfunding campaigns for a specific cause is in the knowledge of where each dollar of your donation is being spent.

Other medical companies are utilizing new crowdfunding opportunities, including the rare genomics institute and various un-named organizations granting funds to families fighting cancer and terminal illness.

Crowdfunding is a great option to raise funds, but before you or anyone else embarks in this direction, you must understand the legality of the situation and prepare yourself for the rules and regulations. We are here to help you understand your options with crowdfunding and the guidelines you must follow to navigate through these funding procedures. For more information on crowdfunding procedures and the options available, please contact Stock Connections. We are here to help you help your cause.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!


Withholding Tax Rates and Equity Compensation in 2013

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As you may have heard, the Bush tax cuts are set to expire at the end of this year. There are two things about this we know for sure. The first one is that if legislation cannot agree and the tax rates are not extended, the Social Security tax rates will go back to their previous rate of 6.2% from their currently reduced 4.2%. The second thing we know is that tax rates are uncertain as to what would apply to stock compensations.

The end of the tax cuts would also raise the flat federal rates on withholding tax rates for supplemental wage incomes. For stock compensation, the current 25% and 35% are tied directly to tax brackets. These would be raised to 28% for amounts under $1 million and 39.6% for amounts over $1 million in a calendar year. Additionally, Medicare tax rates also come into play for high-income earners. Those taxpayers will have an increase to 2.45%.

In 2012, the firm Equilar looked at trends in stock compensation. Their research showed that companies in recent years (2007 through 2011) decided to stay away from stock options and focused on restricted stock. Since 2007, options only decreased from 16% to 6.4% and restricted stock only increased from 17% in 2007 to 27.9% in 2011. The numbers of companies granting both types of equity compensation increased to its highest of 66.4% in 2010 but managed to come back down to 63.7% in 2011 and has remained the same for the most part. Another important topic that Equilar looked into was performance features and their continued growth. Findings showed that over half of the companies revealed that they used performance based incentives.

Planning ahead and preparing as much as possible is key to financial success. If you need help with the possible future changes, give us a call! Stock Connections can help you understand all the ins and outs and help get you to your financial goals.

Business and Crowdfunding – The Effects Of The JOBS Act

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The JOBS act was created by the Obama administration to legalize crowdfunding by individuals of modest income.  What this means is that they can now become micro-investors for the thousands of startups or businesses born every year. For more detailed information in a more visually appealing way, check out this infographic by Forbes.

With this new business opportunity for potential investors, all small businesses and startup companies have to learn how to market their products or services differently to appeal to these new potential investors. Read the rest of this entry »

Crowdfunding Exemptions – What Are They?

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As discussed in an earlier post, the JOBS Act now allows for a small business owner and startups to get funding, otherwise known as crowdfunding, from social media or other forms of Internet outreach. This provides them with money they otherwise would not have been able to get. Some restrictions do apply for both the business owner and the investor.

The biggest benefit is that companies now can get an unlimited number of investors for their business. As long as certain requirements are met, the JOBS Act has provided some crowdfunding exemptions. Read the rest of this entry »

Financial Lingo – 5 Basic Stock Option Terms

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We have introduced many different types of stock options in the last few weeks and while you may have an understanding of the options themselves, we understand how confusing it can be to take in all the financial lingo and information without an introduction to some of the basic terminology. Here we go: Read the rest of this entry »

Employee Stock Options – Questions to Understanding Your Plan (part 3)

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Today we are wrapping up the 3 part series of questions to understanding your option plan. These last four questions will go over strike pricing, statements, holding time and exercising your options.

Strike price – what is it and why do I care?

The strike price is a crucial aspect that essentially determines the value of the stock. Along with the expiration date, it is determined at the time of the grant.  This is important because it is the price you are paying for your options.

Are there certain forms I need to fill out? Will I get statements?

Getting statements really depends on your company. Some companies will update the employees on the status of the stock and others won’t.  There are different forms to fill out if you are reporting these options to the IRS or including them in your tax returns. Read the rest of this entry »

Employee Stock Options – Questions to Understanding Your Plan (part two)

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Welcome to part two of three on understanding your employee stock options. Do keep in mind that the answers to all of our questions are directly related to companies and employees conducting business the US. So, without further ado, let’s continue where we left off on part one.

What would happen to my stock if the company is acquired or even merges with another company?
Is your vesting accelerated? Accelerated vesting is a form of vesting that is done much faster, therefore the employee can receive the monetary value benefit of the option  sooner.  Accelerated vesting sometimes occurs when a company is merging or there is an acquisition.  There are two ways this can happen, a single-trigger or double-trigger accelerated vesting.

A single-trigger mode happens right away after the companies have merged. Double-trigger happens when the companies merge but youare laid off as a result of the merge. This video easily highlights the differences.

As an employee, how do I measure the liquidity of my options?
There are two main factors you want to know in order to be able to measure the liquidity of your options. They are daily volume and open interest.  The higher daily volume the better it is for the stock. That means that people view it as a secure investment.  The second is open interest. That is important to keep in mind because it tells you the number of contracts that are still pending. 

Check back in for the last part of the three-part series: Employee Stock Options – Questions to Understanding Your Plan.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

Employee Stock Options – Questions to Understand your Plan (Part 1)

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As an employee, understanding the stock options you have been presented with can be a tough process. Financial lingo is not easily comprehended  by the average employee and because of the potential gap in understanding, important information about your stock options may be overlooked. With these common questions, we can help ensure that you have a full understanding of your current or potential stock option plans. Today, we will introduce the first three of ten questions that you should always ask when considering your plan.

What type of options have I been offered?

In our past blogs we have introduced the two most common types of employee stock options; non-qualified and incentive. As we have discussed, the main difference between these options lay in their taxation.  When presented with an option, be sure to understand the type of stock option you have been offered and be prepared with your own research concerning incentive and non-qualified stock options, their pros and cons and how they could affect you and your financial plans.

How many options do I get?

The total amount of stock options that a company can grant differs from one group to another for various reasons. How many options an employee is offered can be impacted by the size of the company, their pay standards, their industry and your position among countless other possibilities.  Keep in mind that it is a common trend among companies to award a larger amount of shares when there is a larger associated risk. Don’t focus solely on the number of shares you are being awarded but try to consider potential value and long term gains.

What is my vesting schedule?

A vesting period is the amount of time in which you earn the options. It is common for vesting to be based on merit and/or time within the company. When negotiating as a new hire, it is not unheard of for special vesting terms to be created; this can include special grants and recognition awards. Keep in mind that you will have greater flexibility if your vesting period is accelerated.

Be sure to check back later this week for parts two and three and for the remaining questions you should ask to understand your employee stock option plan.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

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SEC and SOX Compliance – What happens if I don’t comply, what are the penalties?

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The Securities Exchange Commission was created by congress to protect investors and regulate the market. Many acts have been put in place to do such things, including the Sarbanes-Oxley Act, or SOX. The intent of the SOX act is to protect investors from fraudulent practices made by companies. This came at the heels of scandals such as Enron and WorldCom.

This institution and act are so important that the penalties  must be taken seriously. There are multiple codes to the laws and breaking them has different consequences.

To begin with, the SOX act requires that a company keep records of all paperwork relating to an audit for 5 years. Another requirement set forth by the Securities Exchange Commission is that every CEO of a company must disclose the company’s current financial status as a result of their operations. Failure to comply with the requirements of keeping records can result in penalties and even jail time; destroying documents con result in  a 10-year felony.

As mentioned above, the penalties differ based on what parts of the SOX act are  violated. Compliance penalties range from loss of exchange listing to fines upwards of millions of dollars.

CEOs and CFOs are also held accountable and can incur hefty penalties for the company’s actions, especially if they disclose inaccurate information. If the executive was not aware of the company’s wrongdoing, he or she still could face a one million dollar fine and up to ten years imprisonment. If the records are knowingly reported incorrectly, the CEO or CFO can be fined up to five million dollars and face up to 20 years in prison.

It is important to understand that this applies to all public companies in the United States that have registered equity or debt with the Securities Exchange Commission.

If you have any questions, Stock Connections can help. We specialize in SEC and SOX compliance. Give us a call!

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

Investor Relations – How to Choose and Stay Connected To Your Investors

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The investor relations department in public and larger private companies is in charge of accurate company affairs, but that’s not all these experts do. The job of an investor relations professional is more than helping to sell company stock; this department “serves as a bridge for providing market intelligence to corporate management.”

In order to stay connected to your investors you first must be able to find the right ones for you and your business. According to Podium Ventures, there are three things to keep in mind when deciding on an investor. First is finding someone who complements your business. Working with someone who has and/or lacks the same things as your business makes no sense. Next, make sure you are legally protected when it comes to monetary issues; ensure that the investor can keep up their end of the bargain. Lastly, “check the closet.” Double check that the person or department you are working with has nothing to hide that could hinder your business.

Just remember that in order for this partnership to work, you should also take a look at their practices. InterCall, for example, has a list of best practices for Investor Relation calls. Their tips include keeping the call short; usually a minimum of 30 minutes, anything more and the attention span of most adults starts slipping. Another tip is to switch speakers during the presentation. The different paces and tones of voice will keep the listeners engaged through the entire call.

Remaining connected to your investors is no different than staying connected to your business partner.  Do not be afraid to subscribe to the “it’s nothing personal, it’s just business” motto. No matter how much you might like the person, your relationship should remain focused on the business. Thus, if the investor does not have the qualifications you are looking for, it is best to move on until you can find someone you can feel comfortable with in making decisions.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

Crowd Funding Campaigns – How Planning Can Make All the Difference


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Crowd funding is a popular trend in the financial and business worlds that has been well known in Silicon Valley for quite some time. While the concepts of crowd funding are innovative, the opportunities created can be overshadowed by a lack of effective planning practices. The following are a few tips for planning a successful crowd funding campaign that will also be fully compliant to the standards of the Securities Exchange Commission:

Ask for the minimum – NOT the maximum: Asking for the maximum can present issues for entrepreneurs when using crowd funding programs like Kick Starter. Begin by asking for the minimum amount needed to successfully get off the ground. Additional funding can be sought out at a later date if needed.

Find the perfect time frame: Not too long and not too short: Give yourself adequate time to positively influence investors. While the past has shown that shorter crowd funding campaigns have a higher success rate, this is not referring to a matter of days but instead months as opposed to years.

Be credible and persuasive: To inspire investors, you must have tangible information for them to grasp. Be overly prepared, create financial statements that are in depth and understandable. Additionally, creating high quality materials explaining your venture and your business model, if done right, will serve you well. Remember, there are standards set forth by the Securities Exchange Commission and any unethical behavior is subject to their penalties.

Stay in contact with your investors: Send regular updates 1-2 times per month to your investors depending on your total time frame. Investors are offering up their own money to help you achieve your own goals; it is never acceptable to take their money and leave them up in the air regarding your progress.

Leave no stone unturned: Investors like to know all the details. You must have a well thought out and intricately researched plan concerning your business and the crowd funding you plan to seek. You will need to provide a business plan and financial statements to the Securities Exchange Commission in addition to your investors. Always be sure to represent yourself and your plans professionally and accurately. By maintaining ethical standards of business and keeping all of your information open and available for investors, the Securities Exchange Commission will be an ally in your venture.

Network, network, network: Past studies have actually shown that about 30% of crowd funding sources come from an individual’s own personal network. This means that family, friends, coworkers and colleagues can make all the difference between success and failure. Network early and network often, it will take time and preparation to inspire a network of fans and friends to become a network of investors.

Always be lawful and compliant: As with any financial transaction, there are rules and regulations set in place to protect entrepreneurs and investors alike. Be sure to be well versed in the JOBS Act as well as the crowd funding standards as set forth by the Securities Exchange Commission.

Crowd funding can be a tough subject to understand and while it can be tedious, having a full comprehension of the rules and regulations as well as what it takes to create a successful plan will make a positive impact on your crowd funding efforts. Here at Stock Connections, we are ready to help you develop a quality plan while also staying compliant with the Securities Exchange Commission and keeping potential investors happy. Contact us today for more information.

Non-Qualified Stock Options – What Are They and What Do They Mean?

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As we all know, stock options, are awarded to certain company employees who in turn have the option to (but are not forced to) buy stock in the company for a set price.

So, what are non-qualified stock options and how do they differ from Incentive stock options? Non-qualified stock options are simpler than qualified stock options in that they do not meet all the Internal Revenue Code requirements. With this kind of stock, the employee pays income tax on the difference of the grant price and the fair market value or sale price on the date of exercise.

There are, however, other differences between these two types of stock. The website Diff En has a great comparison chart to clear up all the differences on non-qualified stock options. For instance, a non-qualified stock option can be granted to anyone, not just a company’s employee.

A benefit of this stock is that they can be exercised at any time, after they have vested and before the expiration date – usually 7 -10 years after grant. Another benefit is that they don’t need to be held for a certain period of time because they do not qualify for long-term capital gains but are taxed as ordinary income on the date of exercise.

An additional aspect to consider with non-qualified stock options is the value of the stock. The Diff En website explains that in the case of a qualified stock “The aggregate fair market value (determined as of the grant date) of stock bought by exercising Incentive Stock Options that are exercisable cannot exceed $100,000 in a calendar year.” This is opposed to a non-qualified stock, which simply has no limit on the value.

This short video also points out other major differences;, one of them being the difference in taxation between non-qualified stock and incentive stock options.

So there you have it! If you have any questions regarding the best options for you or your organization, Stock Connections is glad to help. Just give us a call.

Photo Credit: David Paul Ohmer

Equity Compensation Plans: What to Do & What NOT to Do


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An equity compensation plan is an innovative tool used by many businesses and corporations within the United States and worldwide. Creating and implementing a quality plan into action can be a challenge, but with these few simple tips, you can maximize the experience for you and your employees.

Don’t Do The Following:

Don’t make promises you don’t intend to keep: Be as clear and concise as possible when you are putting emphasis on the various benefits associated with your employees’ equity compensation plan. Be careful with any language used to ensure that uncertain outcomes are not unintentionally promised as certain outcomes.  Documents always need to be written by a qualified attorney.

Don’t wait until a candidate is an employee: Having quality options and an impressive equity compensation plan can serve a company very well in any business recruiting procedure. It could prove to be very effective in creating buzz among potential employees if Human Resources highlight the various benefits during their interviews and recruitment activities.

Don’t expect your employee to speak fluent finance language: Be as basic as possible in your terminology; this will allow the largest possible amount of employees to understand the vast majority of their equity compensation plan. Always be sure to have a fresh set of eyes (perhaps someone in a different department) look over the document and make appropriate edits.

Do The Following:

Do over communicate: You will find that there are endless outlets willing to offer up advice concerning equity compensation plans, but with each equity compensation plan being unique, finding information online can leave employees feeling like they are filling in blank spaces with information found on the web. Be in constant communication and don’t allow your employees to make assumptions that could leave them expecting more than you are prepared and able to provide.

Do use tangible examples: Be sure to have explanations prepared to further help your employees understand their equity compensation plans. Creating examples that could be real life scenarios will help prepare employees for the future.

Do use various methods of media: Every brain processes information differently and every individual grasps new and challenging material through various methods of learning. Equity compensation plans can be confusing, so having various ways of disseminating the information will be helpful for employees with different learning styles. Be sure to cater your materials to various methods of learning. Have something for visual learners, audible learners and everything in between.

Here at Stock Connections, we focus on helping you and other business owners with any questions or concerns they may have so they can have the opportunity to provide the most financially fit and sound equity compensation plan to their company or corporation. If you are looking to have your questions answered or want some help with your equity compensation plans then we encourage you to contact us for a personalized conversation and assessment of your equity compensation goals.


The Truth about Equity Compensation Plans

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Understanding the options associated with an employee’s equity compensation plan can be a daunting feat to say the least, but dispelling common myths and misconceptions can help you better understand the programs you have access too. The following are some of the common misconceptions and the truths that we encountered with equity compensation programs.

What you’ve heard:  My company’s stock options are far too simple to require any consultation services or strategic planning.

Here’s the truth: By seeking professional advice, you are increasing your chances for profitable gain. Mistakes in financial situations are incredibly costly and can set you back immensely. With the help of financial specialists, you are safe guarding your investments.

What you’ve heard: I have restricted share grants, so I don’t need to manage any of my other options.

Here’s the truth: All of your outstanding options should be watched constantly. While little is required by you for restricted share grants, other options may expire and thus require attention at all times, to ensure that all financial opportunities are taken advantage of.

What you’ve heard: There are only three times that I should ever sell my stock options. I either need quick money, my shares will expire or the target pricing has been reached.

Here’s the truth: While there are three common factors to consider, they are not the three we have listed above. With the help of professional financial planners, you can find the best time to exercise your options according to factors like time value, your personal concentration and your long-term goals.

What you’ve heard:  Taxes can be avoided.

Here’s the truth: Taxes are a mandatory requirement within equity compensation plans and stock options. It is an unavoidable occurrence, but once again with the help of an effective financial planner, your tax liability can be positively managed.

As with any financial plan, consulting experts and doing research will help ensure a positive future. If you are looking to seek advice on your equity compensation plan, we encourage you to contact Stock Connections. We specialize in equity compensation plans and are prepared to answer any questions you might have.


Mergers and Acquisitions – Common Misconceptions

Mergers and acquisitions don’t always have a clear defining line. What does each of these mean and how do they differ? Fortunately, you don’t have to be corporate finance wiz to get the concept and define the differences of mergers and acquisitions.

Mergers are defined as the integration of two (or more) companies. The way this is done is by offering company A’s stockholders securities of company B.

Acquisitions are different. Unlike mergers, think of acquisitions more like a buy-out or take over. Company A will obtain most, if not all, of company B’s assets and takes complete ownership. By doing this, company A now has control over B. An acquisition is usually done when a company is looking to grow. It is easier for company A to take over company B with their working operations and niche already in place rather than to start from the bottom up.

According to Chief Executive there are six avoidable mistakes

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companies make in mergers and acquisitions. First, loosing sight of the end goal. Next, not doing enough research, followed by not retaining the acquisition’s workforce, not blending culturally, overpaying, and forgetting the other company’s boss. Whether the misconception is that the other company will eventually assimilate or assuming that the deal will make all the money invested back, these are mistakes made in mergers and acquisitions that can be avoided with a little knowledge.

Bozeman Magazine, on the other hand, has the top two misconceptions of mergers and acquisitions.  One is cost, cost, and more cost! Granted, both companies involved in a merger or acquisition have made projections of how much it’s going to cost. But the reality of the situation is that the cost will far exceed those planned numbers. The second common misconception is that timelines and projected profits can be way off the mark, especially because these deals can get extensive and take a long time. Corporate finance executives really need to take these two misconceptions into account when drafting projections in relation to mergers and acquisitions.

Bozeman Magazine leaves us with the following advice, “Use the best professionals you can find. They are worth their weight in gold. Good accountants, good attorneys, and experts at buying, selling or merging businesses will save you time, money and insure a mutually profitable future for all.”

So there you have it! When it comes to mergers and acquisitions, use the best people you can find, including corporate finance experts, and don’t forget to plan for extra cost and time.  Keep this advice in mind and your mergers and acquisitions will be a sure success.

If you have questions about mergers and acquisitions, contact Stock Connections today! We’re experts in both and can help with the process from inception to completion.

What is the Securities and Exchange Commission and What Exactly Does it Do?


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The Securities and Exchange Commission, or SEC as it is commonly known as, is a group set forth to protect investors and keep the functions of the stock market and financial world in order. The SEC was created in 1934 after the Great Depression and the stock market crash of 1929. This commission is charged with enforcing multiple pieces of legislation that have been put in place to keep the financial world as honest and fair as humanly possible.

The Securities and Exchange Commission enforces numerous acts in their daily activities; six of those acts are explained here:

  • Securities Act of 1933: This act was the first attempt at bringing regulation to stock market securities. This act requires that companies putting securities on their stocks register with the SEC.
  • Securities Exchange Act of 1934: This act is all about putting regulation standards in place regarding the sellersof stocks (brokers and dealers, etc).
  • Investment Companies Act of 1940: This act provides protection for investors and mandates that the companies offering both securities and mutual funds disclose the information about their company publically.
  • Investment Advisors Act of 1940:  Just like the Investment Companies Act of 1940, this act is also set forward to provide protection for investors. In this case, protection is from privately sought advisors that sometimes take advantage of their investor clients.
  • Sarbanes-Oxley Act of 2002: As discussed in our previous blog posts, the SOX Act was enacted after scandals like Enron as an effort to maintain financial integrity with corporations and companies.
  • Credit Rating Agency Reform Act of 2006: This act was created to encourage competition to increase quality in credit reporting agencies’ accuracy. This act requires these agencies to register with the SEC.

As you can see, the Securities Exchange Commission is not only charged with many tasks, it is held responsible for many significant aspects of the financial world. Conquering these tasks is no easy feat. If you or your company are looking to create financial plans that are SEC compliant, we encourage you to contact Stock Connections for help. We specialize in SEC and SOX compliance and are happy to help keep you and your business financially sound.



What is the Sarbanes-Oxley Act and Why Do I Care? (Part Two)


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As we learned in our last post, the Sarbane’s Oxley Act is a piece of legislation set forth to help maintain and promote a high level of integrity when it comes to financial reporting. We have already discovered details about the first five titles within the act but with eleven total titles we still have plenty to share. Just to review, the first five titles involved the public company accounting oversight board, auditor independence, corporate responsibility, enhanced financial disclosures and analyst conflicts of interest.  The titles that we will cover in part two are equal in importance and help create a positive and responsible financial environment.
The remaining six titles are as follows:


6. Commission Resources and Authority: The sixth title of SOX maps out the SEC’s ability to bar securities professional from practice and further defines the ways that other professionals like brokers, advisors and dealers can also be barred from practice.


7. Studies and Reports: This title requires the SEC and Comptroller General to create multiple studies based on various financial findings. Examples of these studies would include studies on consolidation, credit rating agencies and various scandals like Enron and Global Crossing.
8. Corporate and Criminal Fraud Accountability: In its entirety, this title includes the specification of penalties for financial crimes like manipulation and destruction of records while also placing a level of protection on any reporter of a financial crime.


9. White Collar Crime Penalty Enhancement: Title 9 of SOX increases the penalties for anyone associated with conspiracies and white collar crime. It recommends stronger sentencing and clearly defines certain practices as criminal.


10. Corporate Tax Return: This being one of the simplest titles to understand defines signing responsibility and states that the CEO should be the signer of all federal tax returns.


11. Corporate Fraud Accountability:  The final title defines various aspects of fraud as criminal offenses (e.g. tampering) and identifies the penalties of those crimes. This title also gives the SEC authority to temporarily freeze suspicious payments for investigation.


As you can see, the eleven titles included in the Sarbanes Oxley Act map out a wide array of issues that have effected financial and corporate crime in the past. While it is a hard topic to understand, here at Stock Connections, we do specialize in SOX and SEC compliance, if you have any questions, please feel free to contact us. We are happy to help.

What is the Sarbanes-Oxley Act and Why Do I Care? (Part One)

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The Sarbanes-Oxley Act, or “SOX” as it is known in day-to-day financial dealings, is a piece of legislation that was brought into action to set new standards for company executive boards, management and public accounting firms in relation to financial reporting. This act has also been known or referred to as the Public Accounting Reform and Investor Protection Act and the Corporate and Auditing Accountability and Responsibility Act.

Named after its two sponsors, Senator Paul Sarbanes and U.S. Representative Michael G. Oxley, this bill was enacted in response to the heavy financial scandals with large corporations like Enron, Tyco and WorldCom – all of which left their investors with billions in losses.

The Sarbanes-Oxley Act is a lengthy piece of legislation that can be daunting in nature and intimidating in length, but in this two part series, we will break down the 11 titles included in the act and hopefully inspire a basic understanding of the laws as they stand today and how they benefit your business and its financial dealings.  These 11 titles all have separate standards and mandates that have been put into action to monitor and maintain a high level of integrity among corporations in their general finance and reporting procedures. Read the rest of this entry »

Mergers and Acquisitions: What’s the Difference?

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Mergers and acquisitions (M & A’s) are often considered to be the same thing and while the terms are similar in root meaning, the concepts are not synonymous with one another. Both mergers and acquisitions bring separate companies together to form a larger unit under one umbrella. Mergers and acquisitions operate on the idea that 1+1=3 and while we do realize that basic math is not logically supported in this algorithm, the solution is derived from the idea that two companies together are more valuable than the two companies separately in relation to share holder and market value.  Additionally, companies will often undergo a merger or an acquisition by purchasing other companies when an opportunity to create a larger, more fluid and efficient company presents itself.

While these two ideas have similarities and are directly related in meaning, their differences are distinct and the concepts are uniquely their own. Read the rest of this entry »

Five Mergers: One for Every Need


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Mergers are common within the business world. A merger is typically known as a combining of two businesses into one larger or more powerful organization, but did you know that there are multiple types of mergers that fit various companies according to factors like market share and audience size?

There are five common forms of mergers:

Conglomerate Merger: A conglomerate merger occurs between companies that participate in completely different activities. There are two different types of conglomerate mergers; pure and mixed. Pure conglomerate mergers occur with companies who share absolutely no commonalities while a mixed conglomerate merger usually involves firms of companies looking for product and market extension. Read the rest of this entry »

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