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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 quoted in Wall Street Journal article on December 29, 2006 about PIPE deals.
SEC Slows Flow of PIPE Deals to a Trickle
by Judith Burns
Washington -- PIPES ARE GETTING clogged in the nation's capital.

Staffers at the Securities and Exchange Commission are increasingly reluctant to sign off on transactions involving "private investments in public equity," or PIPEs, a popular way for public companies to raise cash quickly. The reason: the deals are getting so big and complex that it is causing concern that shareholders aren't aware of the potential risks.

Offerings like these have boomed because they let companies quickly access cash from sophisticated investors, such as hedge funds. This year, a record $27.7 billion of PIPE deals were placed through Dec. 22, according to PlacementTracker, up about 38% from 2005. Buyers in these private transactions receive unregistered securities (typically stock, or debt that can be converted into stock) with the expectation that the issuing company will later obtain SEC approval to register them -- allowing the securities to be resold to the public. In recent months, however, the SEC has blocked scores of companies from registering shares sold in PIPE deals.

Proponents of PIPEs concede that abuses -- including SEC allegations of insider trading by some hedge funds that invested in PIPE deals -- have tarnished the sector. Issuing a large number of shares through a private offering can also flood the market, diluting the value of shares held by stockholders and hurting the stock price.

Of particular concern to the SEC are frequent users of PIPE transactions, and large PIPE offerings by smaller companies. In the wake of the SEC crackdown, the number of deals has declined, particularly since midyear, according to Sagient Research Systems Inc., whose PlacementTracker monitors PIPEs.

Supporters of PIPEs worry the crackdown will close off funding for small companies. Indeed, it can be tough for tiny companies to raise money through bank loans or traditional financing from Wall Street firms -- either they are too small and unproven, or already heavily in debt. PIPEs, by contrast, let companies tap financing by going straight to investors with minimal regulatory fuss.

"There is no alternative for these companies; the only way they can finance themselves is through PIPEs," says David Feldman, a managing partner at New York law firm Feldman Weinstein & Smith LLP.

In the past, regulators would let companies register large numbers of shares issued in PIPE deals -- equal to many times the value of the company's current shares outstanding. Now, securities lawyers say the agency's staff is less tolerant, and frowns on attempts to register shares that amount to more than 33% of the "public float," or the number of shares held by investors not affiliated with the company.

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