[M]axwell is soliciting persons participating in r/stocks, a forum of reddit generally referred to as a subreddit, dedicated to the discussion of stocks.  According to the order, Maxwell is sending private messages to these users, offering them the opportunity to participate in a forex trading program through Cryptobase. 

The parties claim the forex trading program generates lucrative returns paid on a weekly or monthly basis.  Maxwell is telling users the investments are guaranteed, and investors will receive 300, 400 or even 500 percent on a weekly basis.  These statements are fraudulent, according to the order. 

The Securities and Exchange Commission ("Commission") is proposing for public comment amendments to Rule 701 under the Securities Act of 1933 (the "Securities Act"), which provides an exemption from registration for securities issued by non-reporting issuers pursuant to compensatory arrangements, and Form S-8, the Securities Act registration statement for compensatory offerings by reporting issuers. The amendments are designed to modernize the exemption and registration statement in light of the significant evolution in compensatory offerings since the Commission last substantively amended these regulations, consistent with investor protection.

With respect to Rule 701, the proposed amendments would:

• Revise the additional disclosure requirements for Rule 701 exempt transactions exceeding $10 million, including how the disclosure threshold applies, the type of financial disclosure required, and the frequency with which it must be updated;
• Revise the time at which such disclosure is required to be delivered for derivative securities that do not involve a decision by the recipient to exercise or convert in specified circumstances where such derivative securities are granted to new hires;
• Raise two of the three alternative regulatory ceilings that cap the overall amount of securities that a non-reporting issuer may sell pursuant to the exemption during any consecutive 12-month period; and
• Make the exemption available for offers and sales of securities under a written compensatory benefit plan established by the issuer's subsidiaries, whether or not majority-owned.

With respect to Form S-8, the proposed amendments would:

• Implement improvements and clarifications to simplify registration on the form, including:
• Clarifying the ability to add multiple plans to a single Form S-8;
• Clarifying the ability to allocate securities among multiple incentive plans on a single Form S-8; and
• Permitting the addition of securities or classes of securities by automatically effective post-effective amendment.
• Implement improvements to simplify share counting and fee payments on the form, including:
• Requiring the registration of an aggregate offering amount of securities for defined contribution plans;
• Implementing a new fee payment method for registration of offers and sales pursuant to defined contribution plans; and
• Conforming Form S-8 instructions with current IRS plan review practices.
• Revise Item 1(f) of Form S-8 to eliminate the requirement to describe the tax effects of plan participation on the issuer.

With respect to both Rule 701 and Form S-8, the proposals would:

• Extend consultant and advisor eligibility to entities meeting specified ownership criteria designed to link the securities to the performance of services; and
• Expand eligibility for former employees to specified post-termination grants and former employees of acquired entities.

The Securities and Exchange Commission ("Commission") is proposing for public comment amendments to the exemption from registration under the rules of the Securities Act of 1933 ("Securities Act") for securities issued by non-reporting companies pursuant to compensatory arrangements and to Form S-8, the registration statement for offerings by reporting companies pursuant to employee benefit plans. The amendments would establish a temporary provision under Securities Act rules that, on a trial basis, would permit a nonreporting issuer to offer and sell securities for a compensatory purpose to an expanded group of workers without having to register the offers and sales under the Securities Act, as long as certain conditions are met. Specifically, the proposed amendments would permit the issuer to offer and sell securities to those workers who provide services available through the issuer's internet-based marketplace platform or through another widespread, technology-based marketplace platform or system ("platform workers"). The amendments would similarly, on a trial basis, permit a reporting issuer to include such workers in compensatory offerings registered on Form S-8. These proposed rule amendments would expire, absent further action by the Commission, five years from the date of their effectiveness. We are also proposing to amend the 2 rules under the Securities Exchange Act of 1934 ("Exchange Act"). The amendment would extend the exclusion from the definition of "held of record" and corresponding safe harbor, which currently applies to securities held by persons who received them pursuant to an employee compensation plan, to securities held by persons who received them pursuant to a compensation plan for platform workers under the proposed Securities Act rule amendment. The proposed exclusion and safe harbor for securities issued to platform workers under Exchange Act rules would not be temporary.

The proposed rules would amend Rule 701 by adding a temporary rule provision that, for five years, would enable issuers to use Rule 701 to compensate certain platform workers, subject to specified conditions. Under the amendments, an issuer would be able to use the Rule 701 exemption to offer and sell its securities on a compensatory basis to platform workers who, pursuant to a written contract or agreement, provide bona fide services by means of an internet-based platform or other widespread, technology-based marketplace platform or system provided by the issuer if:

• the issuer operates and controls the platform, as demonstrated by its ability to provide access to the platform, to establish the principal terms of service for using the platform and terms and conditions by which the platform worker receives payment for the services provided through the platform, and by its ability to accept and remove platform workers participating in the platform;
• the issuance of securities to participating platform workers is pursuant to a compensatory arrangement, as evidenced by a written compensation plan, contract, or agreement, and is not for services that are in connection with the offer or sale of securities in a capital-raising transaction, or services that directly or indirectly promote or maintain a market for the issuer's securities;
• no more than 15% of the value of compensation received by a participating worker from the issuer for services provided by means of the platform during a 12-month period, and no more than $75,000 of such compensation received from the issuer during a 36-month period, shall consist of securities, with such value determined at the time the securities are granted;
• the amount and terms of any securities issued to a platform worker may not be subject to individual bargaining or the worker's ability to elect between payment in securities or cash; and
• the issuer must take reasonable steps to prohibit the transfer of the securities issued to a platform worker pursuant to this exemption, other than a transfer to the issuer or by operation of law.

The proposed amendments would also permit an Exchange Act reporting company to make registered securities offerings to its platform workers using Form S-8. The same conditions proposed for Rule 701 issuances would apply to issuances to platform workers on Form S-8, except for the proposed transferability restriction.

The proposed amendments would not permit the issuance of securities for platform worker activities relating to the sale or transfer of permanent ownership of discrete, tangible goods. Depending on the results of the initial expanded use of Rule 701 and Form S-8, if adopted, the Commission could consider expanding eligibility to other activities, such as selling goods or other non-service providing activities in the future.

The Commission is proposing these amendments on a temporary basis to allow it to assess whether issuances of securities to platform workers under Rule 701 or Form S-8 are being made for legitimate compensatory purposes, and not for capital-raising purposes. The Commission would also be able to assess whether such issuances have the expected beneficial effects for issuers in the "gig economy" and their investors, including those platform workers who have received securities as compensation, and whether such issuances have resulted in any unintended consequences. These assessments, in turn, should help the Commission determine whether to modify or expand the scope of Rule 701 and Form S-8 on an extended or permanent basis. In order to help in the evaluation of the proposed expanded scope of Rule 701 and Form S-8, the proposed amendments would require an issuer that sells securities to platform workers to furnish certain information to the Commission at six-month intervals.

Today the Commission voted to propose rules that, on a trial basis, would allow public and private companies to offer equity compensation to their gig workers. Taking a cue from the flexibility that the gig economy provides to its platform workers, the proposal demonstrates the Commission's willingness to open the door to opportunities for gig workers to participate in the growth of the companies that sign their checks.  As our economy and work arrangements evolve, we must be willing to experiment with concomitant changes to our regulations.

For decades, the Commission has provided a limited exemption from registration for private companies (Rule 701) and a specialized form for public companies (Form S-8) for certain compensatory securities transactions with employees.  The proposed rules would expand these well-understood and widely used vehicles for compensatory securities transactions to certain gig-workers for a five-year time period.  During that period, participating issuers would furnish information to the Commission so that we can assess the utility of the rules and determine whether such changes should expire, be extended, or be made permanent.  The proposal includes guardrails to ensure that issuances to gig workers are compensatory in nature and not conducted for capital-raising purposes.  We look forward to the input of gig workers and other interested parties. 

As proposed, only platform workers that provide services through an issuer's marketplace platform are eligible to receive equity compensation.  Should we permit platform workers that sell goods through an issuer's marketplace platform to participate?  Consider, for example, the many individuals who have begun offering artfully sewn (and even custom designed) masks during this pandemic, selling them to customers on third-party platforms.  Is sewing custom clothing similar enough to driving that mask-makers ought to be allowed to participate in a program like this?

The gig economy is here to stay. We are proposing to tweak one discrete area of our securities laws to allow the many Americans who engage in gig work because it provides a much-needed source of current income also build longer-term investments.  As our nation's economy heals from the pandemic, many under- or un-employed individuals will be attracted to the flexibility and income opportunities that gig work can offer.  We view today's proposal as a way to improve benefits for these important workers and to introduce them to the powerful role that our capital markets can play in building a nest egg for retirement and for passing along to the next generation.