The New California Finder Law Requirements

  • The finder must be a natural person, not an entity.
  • The transaction must take place in California.
  • The size of the transaction for which the finder is engaged must not exceed $15 million in the aggregate.
  • The finder must not: (a) participate in negotiating any of the terms of the transaction, (b) advise any party regarding the value of the securities or the advisability of purchasing or selling in the securities, (c) conduct any due diligence for any party to the transaction, (d) sell any securities that are owned directly or indirectly by the finder, (e) receive possession or custody of any funds in the transaction, (f) participate in the transaction unless it is qualified by permit or exempt from qualification under California law, (g) make any disclosure to any potential purchaser of securities other than: (i) the name, address and contact information of the issuer; (ii) the name, type, price, and aggregate amount of the securities offered; (iii) the issuer’s industry, location and years in business.
  • The finder must file, in advance of taking any finder’s fees, a statement of information with the finder’s name and address, together with a $300 filing fee, with the California Bureau of Business Oversight, and thereafter file annual renewal statements with a $275 filing fee and representations that the finder has complied with the exemption conditions.
  • The finder must obtain a written agreement signed by the finder, the issuer and the person introduced by the finder, disclosing: (a) the type and amount of compensation that has been or will be paid to the finder, (b) that the finder is not providing advice to the issuer or any person introduced to the issuer as to the value of the securities or advisability of purchasing or selling them, (c) whether the finder is also an owner of the securities being sold, (d) any conflict of interest in connection with the finder’s activities, (e) that the parties have the right to pursue any available remedies for breach of the agreement, and (f) a representation by the investor that the investor is an “accredited investor” as defined in SEC Regulation D and consents to the payment of the finder’s fee.
  • The finder must preserve copies of the notice, the written agreement and all other records relating to the transaction for a period of five years.

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Summarized by Rick Randal<
111 Deerwood Road, Suite 200
San Ramon, CA 94583

The New California Finder Law Requirements

Disclosure Overload – Edith Orenstein on SEC 160413 Reg S-K concept release on Financial Disclosure

April 14, 2016

To Friends of CFO Network:

Most of us, CFOs or other financial statement users, complain about the length and growing length of financial disclosures.  We thought this concept release from SEC was quite interesting – and as there is a chance for one to voice their opinion, we chose to pass this blog from Edith Orenstein along.

Note:  Edith Orenstein, as Director of Accounting Policy Analysis & Communications for Financial Executives International (FEI) supported and coordinated Rick’s efforts while representing life science companies and microcap companies on the elite 2005 SEC Advisory Committee on Smaller Public Companies.  She initiated the FEI financial reporting blog in 2004 and it has been a great source for all CFOs.  Since Edith left FEI, she has continued to blog. 

SEC's Seven Wishes in Concept Release on Disclosure (Reg S-K)

By Edith Orenstein
Reprinted with permission

It's here! The SEC has issued its Concept Release entitled, Business and Financial Disclosure Required by Reg S-K. Approved at an open commission meeting earlier today, the Concept Release is an integral part (or 'foundational product,' as described by SEC Chair Mary Jo White) of the Commission's Disclosure Effectiveness initiative

As detailed in the MACPA blog, the Concept Release can be boiled down to seven general areas, six of which begin with the phrase "Whether, and iso, how." Being a fan of mnemonics, I view these as the 'Seven Wishes,' described in the Concept Release as follows:

  1. whether, and if so how, specific disclosures are important or useful to making investment and voting decisions and whether more, less or different information might be needed; 
  2. whether, and if so how, we could revise our current requirements to enhance the information provided to investors while considering whether the action will promote efficiency, competition, and capital formation;
  3. whether, and if so how, we could revise our requirements to enhance the protection of investors;
  4. whether our current requirements appropriately balance the costs of disclosure with the benefits;
  5. whether, and if so how, we could lower the cost to registrants of providing information to investors, including considerations such as advancements in technology and communications;
  6. whether, and if so how, we could increase the benefits to investors and facilitate investor access to disclosure by modernizing the methods used to present, aggregate and disseminate disclosure; and
  7. any challenges of our current disclosure requirements and those that may result from possible regulatory responses explored in this release or suggested by commenters.

If there ever was a time for constituents to provide their 'wish list' to the SEC on how to improve disclosures, now would be that time. Although early hopes of some constituents were focused on reducing 'disclosure overload,' some may say the genie was let out of the bottle when the Commission began referring to the project by the broader title of 'disclosure effectiveness.' However, the broader title incorporates the notion – consistent with the SEC's mission of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation – that certain increases in disclosure may be necessary to enhance the usefulness of disclosure to investors and others, with the goal of enhancing disclosure being primary, and the goal of making disclosure 'efficient' being a secondary, allied goal.  

As noted by Chair White at the open commission meeting earlier today (April 14, 2016), the disclosure effectiveness initiative is, "a multi-faceted effort that began in late 2013 with a staff report to Congress, mandated by the JOBS Act, on how to update and modernize our disclosure requirements." The Chair then commissioned SEC staff to do indepth studies on the disclosure requirements in Reg S-X and S-K, and there were some preliminary invitations for public comment leading up to today's formal issuance of the Concept Release.

In addition to Congressional interest, other groups orbiting the disclosure effectiveness initiative include a number of SEC advisory committees and private sector constituent groups. The Concept Release notes, "we welcome comments from investors, registrants and other market participants on any other concerns related to our disclosure requirements," and, "[i]n addition to comments received on this release, we will consider any input from investor focus group studies or surveys, the Investor Advisory Committee and the Advisory Committee on Small and Emerging Companies."

The Concept Release carries a 90-day comment period. 

Edith Orenstein

Content and Communications Specialist; Accounting Policy, Regulatory

Note:  Edith Orenstein informs us that one can access this and her ongoing blogs:

  • just link to the post in the MACPA blog (which Edith also wrote):

From there is a box in upper right corner of blog for people wishing to receive email alerts from the blog.

Disclosure Overload – Edith Orenstein on SEC 160413 Reg S-K concept release on Financial Disclosure

Revenue Recognition – the CFO Network View

As most of you know, CFO Network focuses on all technical aspects of US GAAP accounting – from companies going through their very first audit, to companies considering M&A transactions, or an IPO, or public companies wrestling with the demands of SEC Reporting and SOX 404b.

At our core, we are very strong in the area of revenue recognition. Tony Riley and I would like to add our spin to the revenue recognition evolution that is the new accounting standard, or ASC 606 to us ‘accountants’.

  1. The new revenue recognition may seem innocent enough and so most people are avoiding or underestimating it. However, the devil is in the details. Inaction today will impact the future and surprises could happen.
  2. This change is not just for accountants. While the list of tasks for accountants is seemingly self-evident, ASC 606 has cross-functional impact including in areas such as:



    • Legal
    • IR
    • IT
    • HR
    • Internal Audit
    • Treasury/loan covenants
    • Sales & Marketing
    • Operations
    • Tax
  3. Remember the early 2000’s and the disruption from the initial SOX compliance – too much to do, too few people to help. And that was for a compliance matter. Now we have a new way of calculating the top line!! How do we get people to take action! It is a problem for all of us.
  4. It’s effective 2018 – or has it really been in effect since January 1, 2016!!

In addition to the FEI Webinar, we have a couple of short pieces that may be of interest

  • Our friends at Strategy Law issued a Memo from their legal point of view. (It is a 2-pager that is focused on the non-accountant.)
  • CFO Network has a one page overview on the primary impacts of ASC 606.

 If we haven’t caught up with you recently we’d love to hear what is going on.

Warm Regards,

Rick Brounstein
Tony Riley
Managing Directors, CFO Network LLC


Local Connections, Global Solutions

Revenue Recognition – the CFO Network View