2) When ever companies sell shares directly to anyone, be it to individuals, Venture capitalists, people who loan money to the company via convertables, or 'consultants', I'd like to see those persons or companies that do the buying of those shares, classified as insiders, regardless of how many shares they bought, with all the SEC rules applied to those people, that pertain to insiders.
This seems reasonable enough; at least it would be a way of keeping an eye on them, though in every case they DO have to be identified in SEC filings when the deal is originally cut. In the case of consultants, if they got their shares through an S-8, the stock in question would probably already be registered, in which case they could scarcely be compelled to file a 144. If it isn't registered, well, they'll have to file a 144 anyway. None of what you propose would really make what's going on much clearer, I'm afraid.
3) Convertables ... I'd like to see them restricted further, and made so that they could NOT be allowed as instruments to be shorted against, in ANY way.
The problem with this is that then--if we're talking the kinds of converts usually sold by BB companies, that nobody'd want to buy them. The key difficulty is that any company who issues instruments of this kind desperately needs money and is prepared to do anything to get it. If they can't, they may go out of business entirely, which is also not good for shareholders.
4) When ever a company sells directly shares of the company, they MUST do some sort of a filing with the SEC announcing they sold the shares, how many, what price, and to whom. They must ALSO issue a PR to the public, telling them they did this. All of this would HAVE to be done within 10 business days of the event in question.
They already have to file with the SEC. In most cases they have to do this in ADVANCE of the sale, in the form of a prospectus or a memo. But of course that doesn't stop them doing it, no matter how disadvantageous to shareholders. I don't think it's feasible to force them to release a PR; the SEC has no control over that.
One area in which I think some meaningful reform could be adopted has to do with 8-Ks. Companies are required to file them when a "material event" occurs. But different companies have very different ideas about what constitutes a "material event". For some, it would seem, nothing short of a bankruptcy filing qualifies. I don't see why specific guidelines couldn't be developed, listing exactly what sort of "events" must be reported.
5) When ever an event is done by the company, that would increase the O/S for any security, for ANY reason, the company in question, would be reqired to file some sort of form with the SEC within 10 days of that event, or face stiff fines and penalties.
Again, this for the most part would fall under the considerations discussed in (2) above.
6) When a convertable is finally excersized, that the company or better yet, the convertable holder, would have to divulge via a form with the SEC, how many shares were actually excersized by the convertable holder, and if there are any more shares, or amounts of money, remaning to be excersized.
Yes, this is a good idea. It WILL, of course, be reported in the 10-K, but I agree that an immediate notice would be better. Perhaps the company could, under these circumstances, be required to consider it a "material event" about which they'd have to file an 8-K. |
