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Learn about Richard Arnholt's diverse government contracts practice and why he chose to pursue a career in the legal field. Read more>

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In June 2017, Pinnacle Financial Partners, Inc. (NASDAQ: PNFP) closed a $1.9 billion merger with BNC Bancorp (NASDAQ: BNCN) pursuant to which BNC merged with and into Pinnacle. With the completion of the transaction, Pinnacle becomes a Top 50 U.S. Bank. The merger will create a four state footprint concentrated in 12 of the largest urban markets in the Southeast. 

Bass, Berry & Sims has served Pinnacle as primary corporate and securities counsel for more than 15 years and served as counsel on the transaction. Our attorneys were involved in all aspects related to the agreement, including tax, employee benefits and litigation. 

Read more details about the transaction here.

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Regulation A+

It seems that lately there has been a noticeable uptick in Regulation A+ activity, including several recent Reg A+ securities offerings where the stock now successfully trades on national exchanges. In light of this activity, we have published a set of FAQs about Regulation A+ securities offerings to help companies better understand this "mini-IPO" offering process, as well as pros and cons compared to a traditional underwritten IPO.

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SCOTUS Limits SEC Disgorgement Remedies

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June 6, 2017

On June 5, 2017, the U.S. Supreme Court unanimously held that SEC disgorgement remedies used as punitive sanctions for violating federal securities laws constitute civil penalties and are subject to the five-year statute of limitations of 28 U.S.C. § 2462. Kokesh v. S.E.C., No. 16-529, 2017 WL 2407471 (U.S. June 5, 2017).

Section 2462's five-year limitations period applies to any "action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise." 28 U.S.C. § 2462. In 2013, the Supreme Court in Gabelli v. S.E.C., 568 U.S. 442, held that the five-year statute of limitations applies when the Commission seeks statutory monetary penalties. To avoid the implications of the five-year statute of limitations, the SEC sought a disgorgement claim of $34.9 million ($29.9 million of which resulted from violations outside the limitations period). The district court, in a decision upheld by the Tenth Circuit, held the disgorgement claim was not a penalty within the meaning of Section 2462. As a result, the SEC was awarded its full disgorgement request after a five-day trial wherein the jury found the defendant had violated the federal securities laws.

In now reversing the decision of the Tenth Circuit and resolving a circuit split on this issue, the Supreme Court held that "SEC disgorgement constitutes a penalty within the meaning of § 2462." Kokesh, 2017 WL 2407471, at *7. The Supreme Court relied on the Court's 2013 Gabelli decision and prior precedent dating back as far as 1899 to hold that SEC disgorgement goes "'beyond compensation'" and is "'intended to punish, and label defendants wrongdoers.'" Id. at *6 (quoting Gabelli, 568 U.S. at 451-52).

Justice Sotomayor wrote the opinion and included an important footnote inviting further litigation on the applicability of SEC disgorgement remedies with a caution that the opinion should not be "interpreted as an opinion on whether courts possess authority to order disgorgement in SEC enforcement proceedings or on whether courts have properly applied disgorgement principles in this context." Id. at *5 n.3. It, therefore, remains to be seen how the SEC will approach disgorgement requests in future SEC proceedings after this decision but it is now clear that any such requests must be brought within five years of when the alleged fraud occurs.


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