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Specials
David Feldman mentioned in an article on SEC Rule 144(i) in The Corporate Counsel.
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Larry Langs quoted in an article on making startups fit together in the Investor's Business Daily on January 23, 2009
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December 2-4, 2009
David Feldman will speak on a panel at the PIPE Conference, sponsored by DealFlow Media, in Las Vegas on December 2-4, 2009
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November 13, 2009
David Feldman will be a panelist at the Financial Executive Institute seminar entitled, "Where’s the Money? Finding Public vs. Private Capital Today."
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David Feldman's book, Reverse Mergers: Taking a Company Public Without an IPO, now in its third printing, was published in 2006 by Bloomberg Press (available on http://www.amazon.com). View David Feldman's reverse merger blog at www.reversemergerblog.com.
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David Feldman is a contributor to PIPES: Revised and Updated Edition - A Guide to Private Investments in Public Equity (Bloomberg Press, 2005) available on
http://www.amazon.com
.
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Dov Scherzer is the U.S. contributor to the British treatise, Internet Law and Regulation (Sweet & Maxwell, 2d Ed. 1997; 3d Ed. 2002; 4th ed. 2007),
Available Here.
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Dov Scherzer is the U.S. contributor to the British treatise, Electronic Signatures Law and Regulation (Sweet & Maxwell, 1st Ed. 2004),
Available Here.
 
David Feldman referenced in an article from the The PIPEs Report about the SEC's new approval of proposed Rule 144 amendments on November 20th, 2007
SEC Smiles on PIPE Hedge Investors:
Extension of Restricted Selling for Hedged Shares Dumped
By Joe Gose
Posted 11/20/07
The Securities and Exchange Commission, considered among many PIPE players as a regular bearer of turkeys, last Thursday scooped out some gravy instead. The commission approved Rule 144 amendments that will shorten the holding period for investors who own restricted shares in reporting companies to six months from one year  one of the biggest pro-PIPE changes to occur in years. But in a surprising move, the SEC also abandoned the contentious idea of resurrecting the tolling provision.

That provision, eliminated from Rule 144 in 1990, would have extended the holding period for up to an additional six months for non-affiliate investors who sold short an issuer or engaged in other hedging activities while holding that same issuer's restricted shares. The holding period would have been extended for the amount of time hedging strategies were in place, up to six months.

Hedging proponents roundly criticized the proposal, citing lack of evidence that hedging had led to abuse in the context of Rule 144> Commenters also declared that the provision would make hedging more expensive, be hard to police, and make the U.S. derivatives market less competitive. At the hearing to consider adoption of the proposal last week, SEC staffers acknowledged they were persuaded by those comments, though they promised to monitor hedging activities of restricted security holders and to revisit the issue as needed.

"The comment process can work," said David Feldman, a partner with the New York law firm of Feldman Weinstein & Smith, who, along with other PIPE experts, has supported most of the Rule 144 amendments. "There was a drum-beat of opposition to the tolling provision from a lot of different quarters," Feldman said. "PIPE players are now free to hedge and short all they want, and they still can get out in six months. That's huge." Still, a helping of uncertainty surrounds certain of Rule 144's minutiae. While the new Rule 144 amendment will become effective 60 days after publication in the Federal Register, commission staffers didn't discuss whether final rules would be retroactive. That would allow investors who have held restricted securities for at least six months prior to the effective date to sell them. After the meeting, SEC officials, through a spokesman, declined to say whether the final release would specifically address retroactivity, but the spokesman suggested that the subject may be open to interpretation once the rule becomes effective. The vote last week marks the first step in what PIPE experts anticipate will be a significant restructuring of the PIPE market in coming months. The commission last May introduced several proposals crucial to PIPEs, and it is expected to hold hearings and vote on remaining amendments, which include expanding Form S-3 eligibility and Regulation D revisions, by the end of the year. In addition to shortening the holding period for investors, the new Rule 144 will eliminate volume and manner-of-sale restrictions for non-affiliates  those limitations expired after two years under current rules. Affiliates, however, will still be subject to volume and manner-of-sale restrictions, but the sales threshold that will trigger a Form 144 filing will increase to 5,000 shares (an increase from the original proposal of 1,000 shares) or $50,000, up from 500 shares or $10,000. Plus, although not in the original proposal, the SEC will relax the Rule 144(e) volume limitations for debt securities by adding a new alternative test that will allow the resale of up to 10% of a tranche in any three-month period.

The new rules also codify certain staff interpretations relating to Rule 144. Owners of restricted shares in non-reporting companies will still be subject to a one-year holding period.

The new rules will aid small businesses that raise capital in private transactions, said John White, director of the SEC's Division of Corporation Finance, by increasing liquidity of securities issued by the companies and reducing discounts that investors receive. In recent discussions of the proposed Rule 144 changes, however, PIPE experts have debated whether the reduction in discounts would be significant.

The commission also approved final rules that will replace the current "small business issuer" category with a new expanded category of "smaller reporting companies" that will include issuers with less than $75 million public float or revenues of less than $50 million in the last fiscal year if a float is incalculable. Among other changes, the rules will phase out current SB forms, allow smaller reporting companies to use the commission's scaled disclosure and reporting requirements, and allow firms to comply with the scaled financial and non-financial disclosures on an item-by-item basis. The SEC predicts that the new rules, which become effective 30 days after publication in the Federal Register, will affect about 1,500 companies.

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