Securities Fraud Lawyers Blog
While the dust settles on the recent trial of Elizabeth Holmes, former CEO of Silicon Valley startup Theranos, attention is building around the Securities and Exchange Commission’s current and future role in regulating private firms.
Under existing federal law, private firms with less than 2,000 shareholders are not required to register with the SEC nor provide routine disclosures, unlike their public counterparts. [1]
While exemption from such regulatory requirements may provide private startup companies with the freedom to develop their business unimpeded by government, thus encouraging valuable innovation, the rapid growth of the private capital market has experts questioning whether some degree of SEC oversight may be warranted.