The nation's top securities regulator has set its sights on Silicon Valley in recent months, going after initial coin offerings and cybersecurity issues in a way that underscores the need for tech companies that cater to investors to have strong compliance programs, experts say.
Cryptocurrency has proven to be an especially thorny issue for the regulators. The U.S. Securities and Exchange Commission has largely treated initial coin offerings as securities that are subject to the relevant federal laws, even as the question is litigated in federal courts. Meanwhile, the U.S. Commodity Futures Trading Commission has asked the public for feedback to help it better understand and potentially regulate these digital currencies.
"I always advise companies to plan ahead for the day that they'll have to explain to the court why they're right because we don't know where the regulators are headed here," said Keker Van Nest & Peters LLP partner Steven Ragland.
Here, experts share five tips for technology companies to avoid SEC scrutiny.