Inside Securities Law with Frederick M. Lehrer

Notes: The Call That Didn't Happen

Topic: Securities Enforcement, Disclosure & Preventable Legal Mistakes

Opening premise: Nearly every securities enforcement matter the author worked on at the SEC had an earlier turning point—sometimes months or years before regulators became involved—when one phone call to qualified legal counsel might have changed the outcome.

Key Talking Points:

• The missed phone call: Small decisions made without legal guidance can create substantial regulatory exposure.
• Material contracts: A CEO wasn't sure whether a new customer contract triggered an SEC Form 8-K disclosure obligation. Rather than asking counsel, the company didn't file.
• Fundraising and podcasts: An enthusiastic founder publicly discussed a capital raise without realizing that the offering's legal structure depended on restrictions concerning public solicitation.
• Unintentional violations: Securities problems can originate in uncertainty, poor communication, or a misunderstanding of regulatory obligations—not necessarily deliberate fraud.
• The critical moment: By the time regulators investigate, the opportunity for preventive legal advice may have passed.
• Organizational failure: Executives, founders, lawyers, and compliance personnel need clear procedures for escalating potentially material decisions.

Important legal distinction: Not every material customer contract requires an 8-K filing, and not every public discussion of fundraising violates securities laws. The applicable requirements depend on the circumstances and offering structure.

Core Message:

The most consequential compliance failures often begin before anyone recognizes that a legal decision is being made.

Takeaway: The expensive mistake wasn't necessarily the contract, the fundraising announcement, or the podcast appearance. It was proceeding without understanding the legal consequences.

Central question: How many securities enforcement cases could have been prevented by one timely conversation?

Mergers & Acquisitions: From the First Conversation to the Final SEC Filing

Inside Securities Law with Frederick M. Lehrer

A merger or acquisition is more than a business transaction. For a public company, every stage raises questions about material information, disclosure obligations, regulatory compliance, and investor protection.

In this episode, securities attorney and former SEC enforcement attorney Frederick M. Lehrer walks through the M&A process from the perspective of a public company's disclosure responsibilities.

From initial discussions and negotiations to definitive agreements, due diligence, shareholder communications, closing, and final SEC filings, the episode examines when information may become material, what must be disclosed, and how companies can avoid costly mistakes.

The discussion addresses Form 8-K reporting, transaction-related disclosures, the timing of public announcements, and the importance of maintaining an accurate disclosure record throughout the transaction.

The central question: What does a public company need to disclose, when must it disclose it, and what happens when it gets that judgment wrong?

Host Bio

Frederick M. Lehrer is a securities attorney and former enforcement attorney with the U.S. Securities and Exchange Commission, where he served for nine years in the Division of Enforcement. He also served as a Special Assistant United States Attorney.

With more than 25 years in private practice, Lehrer advises public and private companies on securities compliance, mergers and acquisitions, SEC reporting, corporate finance, registration statements, and going-public transactions.

His practice emphasizes accurate, defensible disclosures informed by his experience investigating securities violations and evaluating corporate conduct from a regulatory perspective. Frederick M. Lehrer, P.A.

Links & Resources

Frederick M. Lehrer — Securities Attorney
https://securitiesattorney1.com/

About Frederick M. Lehrer
https://securitiesattorney1.com/about/

Inside Securities Law Podcast
https://securitiesattorney1.com/podcast/

Corporate Law & Mergers and Acquisitions
https://securitiesattorney1.com/services/corporate-law/

The Other Side of the Table — Book
https://securitiesattorney1.com/book/

Contact Fred
[email protected]
(561) 706-7646

Disclaimer

This podcast is provided for general educational and informational purposes only and does not constitute legal advice. Listening does not establish an attorney-client relationship.

Suggested YouTube Title:

Mergers & Acquisitions: What Public Companies Must Disclose to the SEC | Frederick M. Lehrer

The Other Side of the Table — Full Audiobook | Frederick M. Lehrer

Before the SEC asks questions, a company has already created the record: its filings, press releases, investor presentations, financing agreements, and public statements.

This episode of Inside Securities Law with Frederick M. Lehrer presents the complete audiobook of The Other Side of the Table: What Nine Years of SEC Enforcement Teach Issuers About Disclosure, Capital, and Going Public.

Frederick M. Lehrer explains how regulators examine that record—and what founders, executives, directors, and advisors should understand before raising capital, going public, or making their next disclosure.

Beginning with “The Call That Didn’t Happen,” the book follows the decisions that can turn ordinary business activity into regulatory exposure. It examines how enforcement cases begin, how SEC staff reads filings, when optimism becomes a misstatement, and why consistency across investor communications matters.

Topics include private offerings under Regulation D, general solicitation, financing and dilution, routes to public-company status, SEC reporting, and practical disclosure review. The central question throughout is whether the company’s record accurately reflects what management knew when each statement was made.

About Frederick M. Lehrer

Frederick M. Lehrer is a securities and corporate finance attorney with nine years of experience in the SEC’s Division of Enforcement. For three of those years, he also served as a Special Assistant United States Attorney in the Southern District of Florida, prosecuting securities-related financial crimes.

In more than twenty-five years of private practice, he has advised issuers on capital raising, going-public transactions, registration statements, SEC reporting, and disclosure compliance. His work applies an enforcement perspective to the decisions companies make before regulatory scrutiny begins.

Links

Website: SecuritiesAttorney1.com
Biography: About Frederick M. Lehrer
Episodes and subscription options: Inside Securities Law with Frederick M. Lehrer
Publications: Media & Publications
Contact: [email protected]

For general educational purposes. This audiobook does not provide legal advice or establish an attorney-client relationship.

The Call That Didn’t Happen | The Other Side of the Table — Introduction

Before a subpoena, an investigation, or a costly disclosure failure, there is often a question someone never asked.

This opening installment introduces The Other Side of the Table: What Nine Years of SEC Enforcement Teach Issuers About Disclosure, Capital, and Going Public, by Frederick M. Lehrer.

“The Call That Didn’t Happen” explores how seemingly routine decisions can create lasting consequences: leaving a material development undisclosed, discussing a private offering publicly, signing financing terms without understanding the dilution, or paying a stock promoter without reviewing the message.

Written for founders, executives, directors, in-house lawyers, and their advisors, the introduction establishes the book’s central perspective: learn to read your company’s disclosures the way a regulator would—before a regulator does.

Author bio

Frederick M. Lehrer is a securities and corporate finance attorney who spent nine years in the SEC’s Division of Enforcement. During three of those years, he also served as a Special Assistant United States Attorney in the Southern District of Florida. His more than twenty-five years in private practice include advising issuers on capital raising, going-public transactions, SEC reporting, and disclosure compliance.

Links

• Website: SecuritiesAttorney1.com
• Author biography: About Frederick M. Lehrer
• Podcast: Inside Securities Law with Frederick M. Lehrer
• Publications: Media & Publications
• Contact: [email protected]

About Jason

Jason T Wade, also known as Jason AI Wade, is an AI Visibility strategist, founder of BackTier, and host of the AI Visibility Podcast. His work focuses on AI Visibility, Generative Engine Optimization, Answer Engine Optimization, entity authority, and the infrastructure behind machine-generated recommendations.

BackTier.com · JasonWade.com
Bio video

Regulation A-plus gets described as a mini-IPO. That is fair shorthand, and like most shorthand it leaves out the part that matters.

Here is the structure. Regulation A has two tiers. Tier 1 permits up to twenty million dollars in a twelve-month period. Tier 2 permits up to seventy-five million. You register on Form 1-A, and unlike an S-1, you may test the waters — you can solicit indications of interest before you file, provided those materials are filed with the Commission.

The advantages are real. Tier 2 preempts state Blue Sky registration for sales to qualified purchasers, which removes a substantial layer of cost. Financial statement requirements are lighter than an S-1. And the offering can be sold directly to retail investors.

Now the part that gets left out.

Form 1-A is qualified by the SEC staff. It is not automatic. The staff comments on it, and in my experience those comments land in the same places they land on an S-1: the business description, the use of proceeds, and the risk factors. Companies that treat Form 1-A as a lighter document tend to draw more comment rounds, not fewer.

Tier 2 carries ongoing reporting. An annual report on Form 1-K, a semiannual report on Form 1-SA, and current reports on Form 1-U. That is lighter than the Exchange Act calendar, but it is not nothing, and a company that stops filing loses the exemption for future offerings.

Tier 2 also caps what non-accredited investors may put in — generally ten percent of the greater of their annual income or net worth. If your offering depends on large retail checks, that cap constrains you.

And Regulation A-plus does not create a trading market. Qualification lets you sell shares. It does not give you a ticker symbol. If you want your shares quoted, that is a separate process involving a market maker and a filing with FINRA.

So who is Regulation A-plus actually right for? A company with a genuine retail following, a defined use of proceeds, and the ability to carry semiannual reporting. Consumer brands do well with it. Companies with a complicated capital structure and no natural audience generally do not.

I handle Form 1-A drafting and the qualification process on a flat fee, because the scope of that work is definable in advance and the cost should be knowable before it begins.

This is Inside Securities Law. I'm Frederick M. Lehrer. General information, not legal advice.

There is no single way to become a public company. There are five, and choosing the wrong one costs a company a year and a great deal of money.

The first is the traditional IPO on Form S-1. You register an offering with the SEC, an underwriter markets it, and shares are sold to the public. It is the slowest road and the most expensive, and for most companies it requires an underwriter willing to take the deal.

The second is Form 10. Form 10 registers a class of securities, not an offering. You are not raising money. You are electing to become a reporting company, and sixty days after you file, the registration becomes effective whether or not the staff has finished commenting. Companies use this when they want reporting status first and a market later.

The third is Regulation A-plus, sometimes called a mini-IPO. Tier 2 lets you raise up to seventy-five million dollars in a twelve-month period on Form 1-A. The disclosure obligation is real, but the ongoing reporting is lighter than the Exchange Act calendar.

The fourth is a direct public offering. You register on Form S-1 and sell the shares yourself, without an underwriter. It costs less. It also means you are responsible for finding every investor.

The fifth is a reverse merger. You merge into an existing public shell and inherit its reporting status. It is the fastest road and it carries the most inherited risk. I will spend a whole episode on that one.

So how do you choose? Three questions.

First: do you need capital now, or do you need public status now? If you need capital, you are looking at an S-1, Regulation A-plus, or a DPO. If you need status, Form 10 or a reverse merger.

Second: are your financial statements audited and current? Every road requires audited financials. Stale audits are the single most common reason a going-public timeline slips.

Third: how much ongoing reporting can you actually sustain? An S-1 that goes effective puts you into 10-K, 10-Q, and 8-K obligations permanently. Regulation A-plus Tier 2 requires semiannual reporting instead. That difference matters more to a small company than most founders expect at the outset.

I spent nine years in the SEC's Division of Enforcement and three decades in private practice, and the pattern is consistent. The road gets chosen for speed. The reporting burden gets discovered afterward.

Pick the road that matches the obligations you can carry.

This is Inside Securities Law. I'm Frederick M. Lehrer. This episode is general information, not legal advice.

A reverse merger is the fastest way to become a public company. The reason it is fast is that someone else already did the work. That is also the reason it is risky.

The structure is simple. A private operating company merges into a public shell. The shell's shareholders end up with a minority position, the private company's owners end up with control, and the combined entity is a reporting company from day one. No S-1. No underwriter. No waiting for effectiveness.

Then you file what practitioners call a Super 8-K, generally within four business days, containing essentially all the information a Form 10 would have required. Audited financials of the operating company. Full business description. Risk factors. Management. Related-party transactions. The disclosure obligation does not disappear. It moves.

Here is what I tell every client considering this.

You are not buying a corporate structure. You are buying a history. Every liability that shell ever incurred — every lawsuit, every unpaid tax, every undisclosed agreement, every stock issuance that may not have had a valid exemption — you are acquiring all of it. Shell diligence is the entire transaction. If the diligence is thin, the deal is a liability transfer with a ticker attached.

Second, former shell status follows the company. Rule 144 is generally unavailable for securities of a company that was ever a shell, unless the company has ceased to be a shell, is current in its reporting, has filed the information a Form 10 would require, and twelve months have passed since that filing. In practical terms, your shareholders' stock is locked up longer than they expect, and they will be unhappy about it.

Third, the shareholder base. Shells often carry a scattered group of holders left over from prior promotions. You have no relationship with those people and no control over what they do with their shares once a market appears.

Fourth, the staff knows the pattern. Reverse mergers into dormant shells have been the vehicle for a great many pump-and-dump schemes. That does not make your transaction improper. It does mean your filing will be read closely.

A reverse merger into a clean, well-documented, reporting shell, with real diligence and honest disclosure, is a legitimate and sensible transaction. I have handled them. The failures I have seen almost always trace back to diligence that got skipped because the seller was in a hurry.

Be the party that is not in a hurry.

This is Inside Securities Law. I'm Frederick M. Lehrer. General information, not legal advice.

Becoming a reporting company and having a stock that trades are two different things. Companies conflate them constantly.

SEC registration makes you a reporting company. It does not create a market. No investor can buy your shares until a broker-dealer is willing to quote them, and that path runs through FINRA.

Here is the sequence.

A market maker — a registered broker-dealer — agrees to sponsor your quotation. You do not apply to FINRA yourself. The market maker files Form 211 on your behalf. That form asks FINRA to permit the broker-dealer to publish quotations in your security.

FINRA reviews it under its own rules and under Exchange Act Rule 15c2-11. Since the amendments to 15c2-11 took effect, that standard is materially higher than it used to be. Current information about the issuer must be publicly available, and it must stay available. A company that goes dark loses quotation eligibility, and its shares move to the expert market, where retail investors generally cannot buy them.

What goes into that submission is substantial: organizational documents, a capitalization table showing how each block of shares was issued and under what exemption, financial statements, and officer and director background.

Then there are the OTC Markets tiers, which are separate from FINRA entirely, and which were restructured in 2025. OTCQX sits at the top with the most demanding standards. OTCQB is the venture tier. Below that is OTCID Basic, which replaced what most people still call Pink Current, and then Pink Limited and the Expert Market.

For OTCQB specifically, know the current criteria. Current reporting. Annual financials audited by a PCAOB-registered firm. A minimum bid price of five cents for the thirty days before admission, and above one cent to stay in. A public float of at least ten percent, at least fifty beneficial shareholders, and no bankruptcy.

Two practical points.

First, finding a market maker willing to sponsor a Form 211 is often the hardest step, and it has nothing to do with law. It is a business decision by the broker-dealer. Companies are frequently surprised by this. Counsel can prepare a complete and clean information package, but no lawyer can compel a market maker to file.

Second, the timeline is unpredictable. Comments come back. Information gets requested. Plan in months, not weeks, and do not promise your shareholders a date.

I handle the Form 211 information package, the OTC Markets application, and the ongoing disclosure that keeps a quotation alive. What nobody can do is guarantee that a symbol appears on a schedule.

Anyone who tells you otherwise is selling something.

This is Inside Securities Law. I'm Frederick M. Lehrer. General information, not legal advice.

I want to spend this episode on something that is not a rule or a form. How legal work gets priced, and why I do it the way I do.

I bill flat fees. For a defined scope of work, the fee is agreed in writing before the work begins, and it does not change because the work took longer than I expected. For ongoing securities and corporate work, I offer a monthly flat fee covering unlimited services within that scope.

The reason is not marketing. It is about what a meter does to a relationship.

When every phone call has a price, a client who is uncertain whether something is a reportable event has a financial reason not to call. And the calls that do not happen are, in my experience, the expensive ones. The 8-K that got filed late. The press release that went out before anyone read it. The investor who was introduced by a finder, and nobody asked how the finder was being paid. Every one of those is a situation where a five-minute conversation would have cost nothing to have and a great deal to skip.

I spent nine years in the SEC's Division of Enforcement. I have seen what these matters look like from the other side of the table, after they have gone wrong. Almost none of them started with someone deciding to break the law. They started with someone deciding not to ask.

A flat fee removes the meter. Call me. Ask the question that seems too small to ask. That is the entire point of the arrangement.

There is a second reason, which is simple honesty about cost. A registration statement is a definable piece of work. I have drafted a great many of them. I know approximately what it takes. A client deciding whether to go public is making a capital allocation decision, and they cannot make it well against an estimate that might double. Flat fee means the number in the engagement letter is the number.

What a flat fee does not mean: it does not mean cheap, and it does not mean unlimited scope. The scope is written down. If the matter changes materially — a new transaction, an investigation, something nobody anticipated — we scope that separately and price it separately, in writing, before it starts.

If you want to know what a matter would cost, the way to find out is a conversation. No intake form. No queue. You reach me directly.

This is Inside Securities Law. I'm Frederick M. Lehrer. General information, not legal advice.

Rule 506 of Regulation D is the most used exemption in American capital formation and the most frequently broken. Most of the breakage happens at one line: general solicitation.

There are two flavors. 506(b) and 506(c).

Under 506(b) you may sell to an unlimited number of accredited investors and up to thirty-five non-accredited investors, provided those non-accredited investors are financially sophisticated and receive specified disclosure. There is no dollar limit. You may generally rely on an investor's written representation that they are accredited, absent facts suggesting otherwise. What you may not do is generally solicit. No advertising. No public posting. No pitching a room of strangers.

Under 506(c) you may generally solicit all you want. Advertise it. Post it online. Speak about it at a conference. The trade is that every purchaser must actually be accredited, and you must take reasonable steps to verify it. A checked box is not verification. Tax returns, brokerage statements, or a written confirmation from a licensed attorney, CPA, or registered broker-dealer — those are verification.

Here is where issuers get into trouble.

They start under 506(b), because that is what counsel advised. Then the CEO posts about the raise on LinkedIn. Or the company emails the deck to a purchased list. Or a founder describes the terms on a podcast. That is general solicitation, and it does not convert the offering into a 506(c) offering. It jeopardizes the 506(b) exemption, because verification was never performed on the investors who already came in.

You cannot cure it retroactively. That line runs in one direction.

Two more things that generate enforcement referrals.

Finders. If someone is introducing investors and being paid based on whether the money closes, that person is very likely acting as an unregistered broker. The exposure attaches to the issuer as well, and it can give investors a rescission right.

And Form D. You file it within fifteen days of the first sale. It is a short form. Failing to file it does not by itself destroy the federal exemption, but it is a marker, and markers accumulate.

Nine years reading these files at the Commission taught me that Regulation D matters rarely begin with fraud. They begin with a solicitation that should not have happened, and an investor who lost money and went looking for a remedy.

Get the flavor right before the first dollar moves.

This is Inside Securities Law. I'm Frederick M. Lehrer. General information, not legal advice.