'Cheap stock' options draw SEC review: at issue: the valuation given and its effect on earnings

Article Abstract:

The SEC is increasing their investigations of start-up companies' valuation of employees' stock options. Colloquially called the "cheap stock problem," companies confronted with it may pay heavy penalties which can last for years. When the agency requires justification for what in hindsight appears to be a low valuation of employee stock options, the company may conclude it needs to take a compensation charge, which can result in a big earnings reduction. The underwriters of the deal may then balk at trying to sell the stock of a company whose earnings seem to have evaporated.

Investigations, Securities, Valuation, Going public (Securities), Initial public offerings, United States. Securities and Exchange Commission

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More courts find de facto 'franchises;' unexpected status triggers new obligations, liabilities

Article Abstract:

More liberal franchise laws in 23 states can cause companies to be considered "de facto" franchises and also liable under the laws' restrictions, obligations and potential liabilities. Commercial arrangements which can qualify as franchises include trademark licenses, joint ventures, corporate partnering and strategic alliances, dealer relationships and software licenses. Plaintiffs claiming to be franchises can sue their alleged franchisors for wrongful termination and dealers wanting to sever relationships with suppliers have an additional way to get out.

Cases, Franchises

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