To: Bear Down who wrote (5252 ) 3/29/2000 1:37:00 PM From: wonk Read Replies (1) | Respond to
BD,...Form S-8 also has been misused to register securities issued to compensate ?consultants? and ?advisors? for promoting the issuer?s securities.[12] This practice facilitates securities fraud by providing compensation as incentive to persons who hype the issuer?s stock, and may result in these persons conditioning the market for resales of the issuer?s securities. sec.gov ...As revised, securities promoters clearly will be excluded from the scope of persons eligible to participate under the exemption. Independent agents,37 franchisees and salespersons who do not have an employment relationship with the issuer no longer will be within the scope of "consultant or advisor."38 A person in a de facto employment relationship with the issuer, such as a non-employee providing services that traditionally are performed by an employee,39 with compensation paid for those services being the primary source of the person's earned income, would qualify as an eligible person under the exemption.40 Other persons displaying significant characteristics of "employment," such as the professional advisor providing bookkeeping services, computer programming advice, or other valuable professional services may qualify as eligible consultants or advisors, depending upon the particular facts and circumstances.41 Our staff will continue to handle questions about "consultant or advisor" status on a case-by-case basis through its interpretive letter process, but the terms will be interpreted in the same manner for both Rule 701 and Form S-8. ... sec.gov registered or fall under the exemptions to registration for officers and employees. Not sure though.
