I have previously blogged about the SPV phenomenon, whereby investors can get access to private company shares by investing through a vehicle dedicated to that purpose. As I previously explained, the trend has recently exploded, with numerous LLCs selling interests to retail investors through platforms like EquityZen, often with high fees and opaque pricing.  Among other things, the SPV phenomenon allows capital-hungry startups to raise money while (nominally) staying below the 2,000 investor threshold that would trigger mandatory reporting – and startups are increasingly pushing the limits of the law by coordinating with SPV sponsors.

Which is why I was fascinated by recent reports that some startups – particularly Anthropic and OpenAI – have gotten concerned about the number of uncontrolled SPVs selling interests in their shares.

I agree it’s a wild west, and for sure some retail investors are being taken advantage of.  The more interesting question is why companies like Anthropic would care.  Investors in SPVs – and SPVs of SPVs – don’t have a direct relationship with the company and don’t have rights against it, so what are they concerned about? I have a couple of thoughts. 

First, as the Financial Times article explains, OpenAI and Anthropic both have government contracts that require disclosure of their investors, out of concern for foreign investment that might pose a national security risk.  The use of far flung SPVs might make it impossible for both companies to comply.

Second, the original SPV, the one that actually holds the shares – if at some point those managers choose to assert some kind of rights against the entity on behalf of their own (unknown, shifting) retail investors (either by choice, or because the retail investors force action), that might be a problem for the company, especially if those retail investors’ interests diverge from the interests of the venture capital firms who have done most of the sponsoring.  We can spin out scenarios; what if the SPV is leveraged and forced to sell its assets?  What if the company merges and the SPV has appraisal rights? Etc etc

Third, the fees that are layered on top of LLC shares represent, well, rents that could have gone to the operating companies.  And if you assume the LLC interests trade, or new LLCs constantly offer interests on internet platforms, that means the operating company loses control over how its shares are priced.

Fourth, I suppose the operating companies may simply want to protect their images.  To the extent there are shady LLC operators who mislead their investors or even claim to have access to shares they don’t have, the operating company may want to avoid any air of scandal, even if it is not at fault.  And it’s kind of like Hermes handbags, you know?  The company may keep its valuation high by avoiding association with all those… people.

The fifth reason, though, is the most interesting.  Suppose an officer of Anthropic publicly makes some kind of false statement about its finances (I am not accusing Anthropic of anything!  This is just a thought experiment).  It’s not impossible the company will face 10b-5 liability from its direct shareholders, but it’s unlikely.  Most investors who bought directly from Anthropic probably got truthful information, and even those that didn’t may not want to burn their relationship enough to file a lawsuit.  The fraud would have to be fairly extreme, in other words, before we could expect 10b-5 claims from direct investors.

But what about a retail investor who buys shares in an SPV that holds Anthropic shares?  Can that investor sue Anthropic under 10b-5?  I have absolutely no idea.  On the one hand, the SPV is simply a vehicle for investing in Anthropic; Anthropic’s fraud could easily induce a retail shareholder to make a purchase, and injure the shareholder when the truth is revealed.  But, then, there’s been this line of caselaw recently requiring that the false statement only concern the entity in which the plaintiff bought shares, although how that standard is defined is … opaque, to me. (Most recent blog post here.)

Plus, in Stoyas v. Toshiba, 896 F.3d 933 (9th Cir. 2018), the Ninth Circuit held that if American investors buy unsponsored ADRs of a foreign issuer, the foreign issuer’s false statements may not have been made “in connection with” the ADR purchases.  Maybe.

Frankly, this is all very confusing which means the only real certainty I have is that there is no certainty as to whether these cases would, or would not, bar an investor in an Anthropic SPV from suing Anthropic directly under 10b-5.  And god only knows what the common law fraud standards might look like.

So, yeah, I can see why these companies are fine with coordinated SPVs, and less fine with uncoordinated ones.

Of course, then, that gets back to the original problem – the more coordination, the more risk that these arrangements look like a mechanism to avoid the requirements of public reporting. 

Which, to be fair, they are.

The AALS Section on Securities Regulation is soliciting papers for its Works-in-Progress program at the 2026 AALS Annual Meeting, which will be held from Jan. 6 to Jan. 9, 2026 in New Orleans, Louisiana.

Scholars of all levels of seniority are invited to submit unpublished working papers or extended abstracts on any topic within securities regulation. We are looking to highlight the wide range of exciting work currently being done in our field. We expect to select three to four papers for presentation.

Submissions should be sent by email to Professor Nicole Iannarone (nicole.g.iannarone@drexel.edu) and Professor George S. Georgiev (ggeorgiev@miami.edu) on or before Monday, Sept. 15, 2025. The Section’s Executive Committee will review all submissions and make final selections by Sept. 26, 2025.

We are also excited to preview the Section’s Main Program: “A New Day at the SEC”: Since taking over in April 2025, SEC Chairman Paul Atkins has often repeated that “it is a new day at the SEC.” This motto is reflected in reality. From crypto assets to climate disclosure, administrative procedure to accredited investors, and many regulatory areas in between, the “new” SEC has made substantial changes, often through informal guidance and selective enforcement. This expert panel will explore these changes, the potential challenges and uncertainties they entail, and the implications for securities law policy and scholarship.

Law school taught you how to think like a lawyer.
But did it teach you how to practice like one?



On Sept. 5 the University of Miami School of Law‘s Transactional Skills Program—together with the Florida Bar Corporate Counsel Committee and the Miami-Dade Bar Corporate Counsel Committee—is convening a hands-on, interactive Bootcamp.



Who’s it for?

• Outside counsel looking to better serve corporate clients.
• In-house lawyers who want to sharpen their business edge.
• Junior lawyers eager to build confidence.
• Seasoned attorneys who just need a smart refresher.


Here’s what’s waiting for you:

• AI Prompt-a-thon – Forget the tired “hallucinations” talk. Learn practical AI strategies from someone who actually trains law firm partners. Walk away with prompts and workflows you can use immediately.
• Business & Financial Literacy – When I went in-house, I had to take a 3-day “Accounting for Lawyers” course just to catch up. We’ll give you the essentials in one session from a former BigLaw partner, an in house lawyer from one of the largest business insurers, and an accountant—so you can speak the language of your business clients.
• Clauses that Matter – Poor drafting can cost millions (and AI cut-and-paste won’t save you). Hear what counsel zero in on and how to avoid those mistakes.
• Luncheon Keynote— Laura Frederick , CEO of How to Contract. She’s changing the way lawyers think about contracts worldwide and sharing her perspective with us.
• Key Contracts Every Lawyer Should Master – Not a “how-to” drafting class. Instead, learn how to uplevel your reading, redlining, and risk-spotting on the contracts you see every day or soon will.
• Live Negotiation with Heavy-Hitter GCs – Watch seasoned in-house counsel go toe-to-toe. See their strategies, hear their playbook, and reflect on what it reveals about your own negotiation style in a fun, engaging close out.



Throughout the day we will have hands-on redlining & revisions and a detailed glossary of key terms & resources you’ll actually keep using Food, networking, & cocktails while the traffic dies down (because, Miami 🏝️)


FL CLE Credit:

• 9 General
• 1 Ethics
• 1 Technology
• 9 Business Litigation




Seats are limited. If you’re in South Florida, grab yours. If you’re not, forward this to a colleague who needs to be here. Question? Email me at mweldon@law.miami.edu. Register here. Hope to see you in Miami!

Couple of interesting securities law developments this week –

First, the Third Circuit’s opinion in Boilermaker Blacksmith National Pension Trust v. Maiden Holdings Ltd, interpreting the Supreme Court’s decision in Omnicare, Inc. v. Laborers District Council Construction Industries Pension Fund, 575 U.S. 175 (2015).  Omnicare explained that statements of opinion can be actionable under the federal securities laws, if they are either literally false representations of one’s own opinion (“haha I said I believed we’d do well this quarter but I don’t believe that at all!”), or if they omit material facts regarding a genuinely held belief that render the opinion misleading.  The Supreme Court gave the following examples:

A reasonable investor may, depending on the circumstances, understand an opinion statement to convey facts about how the speaker has formed the opinion—or, otherwise put, about the speaker’s basis for holding that view. And if the real facts are otherwise, but not provided, the opinion statement will mislead its audience.  Consider an unadorned statement of opinion about legal compliance: “We believe our conduct is lawful.” If the issuer makes that statement without having consulted a lawyer, it could be misleadingly incomplete. In the context of the securities market, an investor, though recognizing that legal opinions can prove wrong in the end, still likely expects such an assertion to rest on some meaningful legal inquiry—rather than, say, on mere intuition, however sincere.  Similarly, if the issuer made the statement in the face of its lawyers’ contrary advice, or with knowledge that the Federal Government was taking the opposite view, the investor again has cause to complain: He expects not just that the issuer believes the opinion (however irrationally), but that it fairly aligns with the information in the issuer’s possession at the time.

In Maiden Holdings, the Third Circuit – accepting, I believe, framing proposed by plaintiffs – held that this standard actually articulates two separate pathways by which an opinion statement may become misleading.  First, the statement may impliedly misrepresent the process by which the opinion was formed; second, the statement may impliedly misrepresent the speaker’s knowledge of contrary facts.  As the Third Circuit put it:

The Supreme Court identified two ways in which an opinion statement may mislead investors “about the speaker’s basis for holding that view.”  First, an opinion statement may mislead investors about what the speaker did by “omit[ting] material facts about the issuer’s inquiry into” the facts relevant to the opinion (“inquiry theory”).  The statement, “[w]e believe our conduct is lawful,” for example, may be misleading if the speaker concealed that he did not consult an attorney before forming the opinion.  Second, an opinion statement may mislead investors about what the speaker knew by “omit[ting] material facts about the issuer’s . . . knowledge” of the evidence for and against the opinion (“knowledge theory”).  The same statement, “[w]e believe our conduct is lawful,” may therefore be misleading if the speaker withheld the fact that his own lawyers told him otherwise.

In Maiden Holdings, the allegation was that Maiden had misrepresented the adequacy of its loss reserves, given the weak performance of one of its insureds, AmTrust.  The case was in an odd posture where the district court ordered very limited discovery, and then granted summary judgment to defendants (meaning, among other things, that the record was more developed than it would be at your typical motion to dismiss stage).

In that context, the Third Circuit held that the district court erred, because it granted summary judgment to defendants on the grounds that Maiden had, in fact, considered AmTrust’s historical performance when setting its reserves. But the plaintiffs had not alleged that defendants inaccurately described their process – i.e., the plaintiffs did not challenge that Maiden Holdings had indeed considered AmTrust’s historical performance. Instead, the plaintiffs had alleged that Maiden Holdings had misled investors by not disclosing its knowledge of contrary facts, i.e., AmTrust’s performance, which contradicted the performance information Maiden had disclosed to investors.  Because the Third Circuit believed there was a genuine issue of fact as to whether Maiden’s knowledge of contrary facts rendered the opinions misleading, the grant of summary judgment was reversed.

Probably a lot of attorneys will want to study the Third Circuit’s discussion of how loss reserve statements may become misleading, but I’m actually more intrigued by the frame, i.e., deficient process vs. contrary facts, which is not something I’d seen before.  At a high level, I’d say they collapse in the way the Supreme Court described: the investor is misled about the basis for the opinion.  A reasonable process presumably takes contrary facts into account, and if investors expect your process is reasonable, they probably expect there are some number of contrary facts in the mix, and therefore won’t be misled if you fail to mention them specifically.  By contrast, if your contrary facts are overwhelming and didn’t affect your opinion, probably the process is verkakte, you know?  Still, I imagine this approach may help clarify the analysis for courts.

Second, we have the Ninth Circuit’s opinion in Sneed v. Talphera, which concerned marketing statements surrounding a new opioid drug.  The company used the slogan “Tongue and Done” to refer to easy under-the-tongue administration.  The FDA issued a warning letter objecting that the slogan was misleading.  But that was not enough for the Ninth Circuit to conclude the slogan was misleading to investors. The facts are colorful but Imma skip them; I’m interested in the legal principle here, which is:

This case provides an example of how FDA regulations may require the disclosure of information to medical personnel that a reasonable investor would not need. … the FDA regulations on misleading marketing conflict with our expectation of how reasonable investors behave. We expect reasonable investors to read an entire document, including the fine print and caveats, while FDA regulations dictate that “a brief statement[]” “in another distinct part of an advertisement” does not correct misleading statements made elsewhere in an ad. 21 C.F.R. § 202.1(e)(3)(i). FDA regulations also explain that an “advertisement does not satisfy the requirement that it present a ‘true statement’ of information . . . [if it] fails to present a fair balance between . . . side effects and contraindications and . . . benefits.” 21 C.F.R. § 202.1(e)(5)(ii). But we expect reasonable investors to pay attention to caveats and disclaimers even if less prominently displayed.

See, this is weird to me.  If you think of a single average investor, I’d expect them to pay a lot less attention to medical caveats than the medical professionals with medical degrees who are expected to administer a drug without killing their patients.

That said, the specific context of fraud on the market is different.  In a fraud on the market case, you’re not talking about a single investor, but the entire market of them – some of whom will include people with specialized training.  In that context, when you’re talking about the entire universe of people who will read disclaimers and set the price, sure, I can believe the entire universe of people, who include medical professionals, will weight disclaimers more than any single medical professional or single investor.  And, in fact, the Ninth Circuit has drawn that distinction before.

Sadly, however, in this case, the Ninth Circuit made no distinction between fraud on the market and other contexts – it simply held that average stock trader understands medical disclaimers better than doctors.  Which, you know.  Here’s hoping not.

And then there’s Masimo.  Mike Levin and I discussed the Masimo activist dispute in our Shareholder Primacy podcast, here. (Podcast currently on a summer break; back after Labor Day.)

The latest is: Activist investor Politan, having taken control of Masimo, filed suit against the investor RTW, alleging that it formed a 13d group with founder and former CEO Joe Kiani to fight the Politan attack.  In doing so, they are alleged to have coordinated their votes (including empty votes, which is a whole separate thing), and because, together, they counted as insiders for the purposes of Section 16(b), any short swing profits received by RTW would need to be disgorged.  A district court recently rejected RTW’s attempts to dismiss the case, concluding that Politan adequately alleged – for pleading purposes – that RTW and Kiani had “combined in furtherance of a common objective—a common objective of either acquiring, holding, voting, or disposing of securities,” which would make them a 13d group.

What’s interesting here is, a 13d group is formed when investors combine to further a common objective, but – absent mindreading devices – it’s usually hard to tell when a group exists among apparently-disparate shareholders who take care not to paper their arranegement.  And there are precious few actual reported cases that discuss the kinds of allegations that are sufficient to establish, for pleading purposes, the existence of a combination.  The Masimo case is unusual for that reason, but – and here’s the rub – the actual facts are so outrageous that they’re unlikely to transfer to other scenarios.  Like, Kiani apparently sent a text photo of a whiteboard with confidential vote totals to RTW.  That’s … pretty good evidence that the two were “combined in furtherance of a common objective.”  One can only hope that future plaintiffs/enforcers don’t need to hit quite so high a bar.