The Isolated Offering, Vol 9, Issue 2
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The Isolated Offering
A Newsletter of The Lebrecht Group, APLC
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| February 17, 2009 |
Volume 09, Number 2
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| In This IssueWill Audit Fees Increase Again?
Fair Disclosure During PIPE Transactions TLG’s Compliance Funding Program Rule 144′s Impact on Shell Companies: One Year Later Contact Us http://www.thelebrechtgroup.com 9900 Research Drive 406 W. South Jordan Parkway |
Will Audit Fees Increase Again? Madoff and Other Ponzi Schemes May Drive Up CostsDespite the current deflationary environment, don’t expect audit fees to go down any time soon. In fact, you can bet that audit fees will rise in 2009 and beyond because of the Bernie Madoff and other Ponzi schemes. Plaintiffs’ lawyers are initiating lawsuits against accounting firms accusing the firms of negligence for failing to detect the Ponzi schemes. A substantial increase in the number of these lawsuits will likely drive up the cost of professional liability insurance and other accounting firm costs, which the accounting firms will likely pass on to their clients. For an interesting article on these lawsuits, click here. Fair Disclosure During PIPE Transactions Featured Client Link:
 With the current scarcity of credit, small public companies struggling to raise cash in either the debt or equity markets have been increasingly looking for alternative financing through private investments in public equity, also known as PIPEs. During PIPE transactions, reporting company executives may intentionally or inadvertently share material non-public information with PIPE investors, who, as a result, gain an informational edge over the company’s other shareholders and the ability to use that edge to profit. This type of selective disclosure is prohibited by Regulation FD. For executive officers of reporting companies who are contemplating PIPE financing, there is a simple solution to this problem. For executive officers who have made proscribed selective disclosures under Regulation FD in connection with a PIPE transaction, the Securities and Exchange Commission (“SEC”) has recommended a particular course of action.. . . . [more] |
