Harvey Kesner Comments on the Impact for Private Offerings and Investor Protections
NEW YORK CITY, NY / ACCESS Newswire / June 30, 2025 / A recent New York Supreme Court decision has reaffirmed critical protections for issuers and others in private securities offerings, marking a significant step forward in the modernization of private capital markets. The ruling, which addresses investor complaints about missed market opportunities during the post-IPO transition process, highlights the importance of transparency and disclosure in exempt offerings under Regulation D and Regulation A+ under the JOBs Act.
Private securities offerings, while attractive to sophisticated investors due to their discounted pre-IPO valuations, often face challenges related to liquidity and market pricing. Unlike IPOs, where shares are immediately tradeable in brokerage accounts, private offerings require a complex and time-consuming process to transfer shares from book entry at a transfer agent to a brokerage account via the Depository Trust Company (DTC). This process, which involves extensive documentation and validation, can lead to delays that frustrate investors seeking to capitalize on market fluctuations.
The recent case, Lance Popo v. Equity Stock Transfer, LLC, and Monogram Orthopaedics, Inc., addressed these very issues. The plaintiff, Lance Popo, alleged that a 3-4 day delay in transferring his shares following Monogram Orthopaedics' IPO caused him to miss out on significant market gains. Specifically, Popo claimed that his $3,500 investment at $4.00 per share, made three years prior, could have yielded an additional $86,000 had he been able to sell at the IPO's peak price of $48.99 the day after the IPO.
However, the court ruled in favor of the defendants, affirming that the timing of share transfers was well-disclosed and that neither the issuer nor the transfer agent owed a fiduciary duty to the investor.
This decision reinforces longstanding legal principles in New York and other states, confirming that corporations and transfer agents are not fiduciaries to their shareholders. It also underscores the importance of clear disclosures and investor education in private offerings.
Harvey Kesner, a leading expert in securities law and co-founder of EquiDeFi, a private offering platform, commented on the broader implications of the ruling:
"This decision is a landmark moment for the private securities market. It validates the protections for issuers and the critical service providers offering private investments responsible for transparency and compliance while protecting them from unfounded claims. At the same time, it highlights the need for regulatory modernization in private offerings to reduce delays and improve investor experiences."
Kesner has been at the forefront of addressing these challenges through education, participation in SEC and other panels and providing his innovative software, which streamlines the private offering process, to issuers and broker-dealers. By automating workflows, enhancing compliance, and reducing manual inefficiencies, EquiDeFi empowers issuers and investors alike to navigate the complexities of private securities with greater ease and confidence.
The court's decision also sheds light on the broader challenges facing private offerings. Unlike IPOs, which provide instant access to shares, private offerings require investors to navigate a multi-step process involving transfer agents, brokers, and DTC. This process can take days or even weeks, during which market prices may fluctuate significantly. The ruling emphasizes the importance of managing investor expectations, solid communication and ensuring that all parties understand the inherent limitations of private offerings.
As the private securities market continues to grow-outpacing IPOs with an estimated $4.45 trillion of Regulation D offerings alone in 2022-modernization is no longer optional. Platforms like EquiDeFi are leading the charge by providing issuers with tools to streamline compliance, reduce delays, and democratize access to private investments.
"This ruling is a reminder that while private offerings present unique opportunities, they also come with unique challenges," Kesner added. "By leveraging technology and fostering transparency, we can create a more efficient and equitable marketplace for all participants."
The case, Lance Popo v. Equity Stock Transfer, LLC, and Monogram Orthopaedics, Inc., is a pivotal moment for the private securities industry, reaffirming the importance of disclosure and the role of technology in addressing longstanding inefficiencies.
For more information on how EquiDeFi is modernizing private securities offerings, visit www.hkesnerlaw.com or www.EquiDeFi.com.
Contact Information
Jack Smith
Marketing
jack@trustpointxposure.com
1-442-220-3131
SOURCE: Law Office of Harvey Kesner P.C. / EquiDeFi, Ltd.
SOURCE: Law Office of Harvey Kesner P.C. / EquiDeFi, Ltd.
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/banking-and-financial-services/recent-new-york-court-decision-supports-modernization-of-private-sec-1044175
