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Small-Firm Task Force

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Sullivan’s interdisciplinary team combines market-leading capital markets, regulatory and enforcement experience to guide clients through FINRA’s evolving oversight of small-cap offerings and foreign issuer activity, as well as broader regulatory developments impacting small-cap, micro-cap and mid-market market participants.

In response to FINRA’s targeted review of small-cap IPOs and related offerings, Sullivan & Worcester has formed a Small-Firm Task Force to help clients navigate the immediate inquiry and the evolving regulatory landscape. The Task Force unites the firm’s Capital Markets, Regulatory Compliance, Government Investigations and Financial Services Litigation practices, each with deep experience advising issuers, broker-dealers, investment funds and institutional investors operating in the small-cap, micro-cap and mid-market segments.

As the challenges continue to mount for issuers, broker-dealers, and investment firms that are involved in the small- and micro-cap market segments and regulatory scrutiny continues to multiply, the Task Force has broadened its focus to related SEC rulemaking initiatives, exchange listing and compliance developments, and enforcement trends that collectively shape the operating environment for smaller public companies and their advisors. Through comment letters and client advisories, Sullivan’s Small-Firm Task Force serves as a platform for thought leadership and advocacy in this evolving space.

Integrated Capital Markets and Regulatory Experience

Sullivan’s Capital Markets team represents underwriters and issuers in public and private offerings of equity, equity-linked securities and debt, as well as in their routine compliance and related obligations. We have particular experience in IPOs, private investments in public offerings, self-underwritings, registered direct offerings, and convertible and hybrid securities. Our lawyers regularly advise leading small to mid-sized investment banks and corporate clients across a variety of industries including technology, biotech, energy and retail.

Our capital markets attorneys and litigators are routinely paired to ensure compliance from the outset of an engagement and to evaluate potential regulatory, litigation or investigation risks when they arise. The two disciplines routinely interact during the life of a client engagement to ensure that best practices are maintained and periodically evaluated and re-evaluated.

Proactive Regulatory and Compliance Guidance

Sullivan’s Regulatory Compliance Group is a unique interdisciplinary practice focused on regulatory compliance and enforcement, white-collar defense, and investigations before administrative, legislative, and self-regulatory agencies. The Group works closely with the Firm’s Special Investigations & Compliance and Capital Markets teams to assure regulatory compliance—the foundation on which our capital markets clients operate. Our practice preference is proactive: we review clients’ policies and procedures to help anticipate and avoid regulatory red flags, traps and surprises.

Government Investigations and Litigation Capabilities

Our attorneys conduct thorough internal investigations and routinely represent clients before agencies. When necessary, we draw on extensive litigation and trial experience to defend clients in court or agency forums. Sullivan’s transactional and enforcement attorneys work closely together to understand the compliance dynamics and to develop oversight standards informed by experience with the DOJ, SEC, self-regulatory organizations and federal regulators overseeing a variety of financial industries.

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SEC Stays Approval of Nasdaq’s $5 Million MVLS Continued Listing Requirement Pending Commission Review
On July 29, 2026, the Securities and Exchange Commission (the "SEC") notified Nasdaq that it had received notices of intention to petition for review of the SEC's July 22, 2026 order approving Nasdaq's proposed rule change requiring listed companies to maintain a minimum Market Value of Listed Securities ("MVLS") of $5 million. Pursuant to Rule 431(e) of the SEC's Rules of Practice, the July 22, 2026 approval order has been stayed pending further review. As discussed in our July 23, 2026 client alert, the approved rule established a new continued listing standard applicable to companies listed on the Nasdaq Capital Market, Nasdaq Global Market and Nasdaq Global Select Market. Under the approved rule, issuers that failed to maintain an MVLS of at least $5 million for 30 consecutive business days would become subject to immediate delisting procedures without the benefit of a traditional cure period. The Effect of the Stay The SEC's July 29, 2026 letter does not reverse or vacate the July 22, 2026 approval of the rule. Rather, it temporarily suspends the effectiveness of that order. According to the SEC, the stay will remain in effect "until the Commission orders otherwise." As a result, the implementation of Nasdaq's new $5 million MVLS continued listing requirement is currently on hold. Until the SEC takes further action, market participants should monitor developments regarding the review process and any subsequent order. Practical Considerations for Nasdaq Issuers Despite the stay, Nasdaq-listed companies that may be affected by the proposed MVLS requirement should continue to evaluate their compliance position and consider the potential impact of the rule should it ultimately become effective. In particular, issuers that may be at risk of falling below the proposed $5 million MVLS requirement should closely monitor whether, if the stay is lifted, any period following the July 22, 2026 approval order will count toward the rule's 30 consecutive business day requirement. We will continue to monitor developments and provide updates as additional information becomes available. For More Information If you would like additional information regarding the SEC's stay of Nasdaq's proposed $5 million MVLS continued listing requirement, the ongoing review process, Nasdaq listing standards generally, or the implications of these developments for your company, please contact the Sullivan & Worcester lawyer with whom you regularly work or any of the attorneys listed below. David Danovitch, Partner (New York) | +1 (212) 660-3060 | ddanovitch@sullivanlaw.com Oded Har-Even, Partner (New York and Tel-Aviv) | +1 (212) 660-3063 | ohareven@sullivanlaw.com Howard Berkenblit, Partner (Boston) | +1 (617) 338-2979 | hberkenblit@sullivanlaw.com Angela Gomes, Partner (Boston) | +1 (617) 338-2957 | agomes@sullivanlaw.com Joseph Segilia, Partner (New York) | +1 (212) 660-3027 | jsegilia@sullivanlaw.com Ron Ben-Bassat, Partner (New York) | +1 (212) 660-5003 | rbenbassat@sullivanlaw.com Eric Victorson, Partner (New York) | +1 (212) 660-3092 | evictorson@sullivanlaw.com Brendan O'Brien, Partner (New York) | +1 (212) 660-3013 | bobrien@sullivanlaw.com Phillip Carnevale, Associate (New York) | +1 (212) 660-3002 | pcarnevale@sullivanlaw.com Elizabeth Johnson, Associate (New York) | +1 (212) 660-3006 | ejohnson@sullivanlaw.com This Client Alert is provided for general informational purposes only and does not constitute legal advice.
SEC Approves Nasdaq's New $5 Million Market Capitalization Threshold for Continued Listing
On July 22, 2026, the Securities and Exchange Commission (the “SEC”) approved Nasdaq's amended proposed rule for a new continued listing requirement requiring Nasdaq-listed companies to maintain a minimum Market Value of Listed Securities (“MVLS”) of $5 million. The SEC approved the proposal as modified by Amendment No. 1 following a lengthy process that generated significant comments from market participants, issuers, investors, exchanges, law firms, and industry groups. The new rule will have a particularly pernicious impact on micro-cap, small-cap and development-stage public companies. Companies that fail to maintain an MVLS of at least $5 million for 30 consecutive business days will be subject to immediate suspension and delisting procedures, without the benefit of the traditional cure period available for many other Nasdaq continued listing deficiencies. Overview of the New Requirement Under the approved rule, Nasdaq-listed companies on the Nasdaq Capital Market, Nasdaq Global Market and Nasdaq Global Select Market must maintain an MVLS of at least $5 million. MVLS is generally calculated as the consolidated closing bid price multiplied by the number of listed securities outstanding. If a company's MVLS remains below $5 million for 30 consecutive business days: Nasdaq will issue a Staff Delisting Determination (“Staff Delisting Determination”). The company will not receive a compliance or cure period. Trading in the company's securities will be suspended from Nasdaq. The company will generally trade on the over-the-counter market while pursuing any appeal rights. This represents a significant departure from Nasdaq's traditional approach to continued listing deficiencies, many of which provide issuers with a compliance period to regain compliance while remaining listed. Amendment No. 1: Limited Relief Through Hearings Panel Review In response to comments received during the rulemaking process, Nasdaq amended its proposal to provide a limited avenue for relief. Under new Nasdaq Rule 5815(c)(1)(I), a Nasdaq Hearings Panel may grant an exception of up to 180 days from the Staff Delisting Determination if the company demonstrates that it can satisfy Nasdaq's initial listing standards. The Hearings Panel also retains authority to reverse a delisting determination if Nasdaq staff acted in error. Importantly, however: The exception is discretionary. Suspension from Nasdaq trading is not automatically stayed during the appeal. The issuer generally must demonstrate compliance with Nasdaq's initial listing standards, which are more stringent than Nasdaq's continued listing standards. Accordingly, while Amendment No. 1 provides a modest additional procedural mechanism, companies should not view it as a substitute for proactively addressing potential listing compliance concerns. SEC's Rationale for Approval The SEC concluded that the new rule is consistent with Section 6(b) the Securities Exchange Act of 1934 and agreed with Nasdaq's position that issuers with an MVLS below $5 million may present heightened risks of manipulation and challenges to maintaining fair and orderly markets. In approving the rule, the SEC relied in part on its own historical analysis, which found that many issuers that remained below the $5 million threshold for 30 consecutive business days continued to trade below that level for extended periods and were frequently later delisted for other quantitative listing deficiencies. Although the SEC acknowledged comments noting that some issuers ultimately recover after temporarily falling below the threshold, it determined that the investor protection benefits of the rule, together with the limited relief provided by Amendment No. 1, supported approval. Practical Considerations for Nasdaq Issuers The new rule creates a material compliance risk for many smaller public companies, particularly those operating in capital-intensive industries such as biotechnology, life sciences, technology, energy transition and other emerging growth sectors. Companies should consider implementing enhanced monitoring procedures to track MVLS on an ongoing basis and evaluate potential corrective actions before a deficiency develops. Potential considerations may include: Capital raising transactions. Strategic transactions or business combinations. Balance sheet recapitalizations. Alternative listing or trading strategies. Other corporate actions designed to improve compliance with Nasdaq's quantitative standards. Because the MVLS calculation is based on market capitalization, often coupled with other listing metrics such as bid price, stockholders' equity, market value of publicly held shares and public float requirements, compliance planning should be evaluated holistically and on a company-specific basis. What Public Companies Should Do Now Nasdaq-listed companies, particularly those with market capitalizations approaching the $5 million threshold, should evaluate the potential impact of the new rule immediately. Companies should consider: Reviewing their current and projected MVLS levels. Assessing compliance with all Nasdaq continued listing standards. Evaluating available capital markets and corporate finance alternatives. Developing contingency plans for potential listing deficiencies. Understanding the implications of a suspension and OTC market transition. Evaluating whether actions can be taken now to strengthen listing compliance and capital market flexibility. The final rule did not set an effectiveness date nor advise issuers whether there would be a phase-in period for complying with the rule, the assumption being that it is effective immediately. For More Information Sullivan & Worcester LLP has been actively involved in advising issuers regarding Nasdaq listing standards, continued listing compliance, capital raising transactions, recapitalizations, exchange matters and SEC regulatory developments. Questions regarding the new MVLS requirement, its potential impact on an issuer's continued Nasdaq listing, the impact on a portfolio company, or available alternatives to address potential compliance concerns, may be directed to your regular Sullivan & Worcester attorney or any member of our Corporate and Securities Practice Group. This Client Alert has been prepared by David Danovitch, a Partner, Angela Gomes, a Partner, Brendan O'Brien, a Partner, and Phillip Carnevale, an Associate, in the Corporate and Securities practice group of the international law firm of Sullivan & Worcester LLP. For more information, Mr. Danovitch may be reached in our New York office by calling +1 (212) 660-3060 or by email at ddanovitch@sullivanlaw.com; Ms. Gomes may be reached in our Boston office by calling +1 (617) 338-2957 or by email at agomes@sullivanlaw.com; Mr. O'Brien may be reached in our New York office by calling +1 (212) 660-3013 or by email at bobrien@sullivanlaw.com; and Mr. Carnevale may be reached in our New York office by calling +1 (212) 660-3002 or by email at pcarnevale@sullivanlaw.com. This Client Alert is provided for general informational purposes only and does not constitute legal advice.
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SEC Turns the Spotlight On Nasdaq Delisting Standards
David Danovitch was quoted in the article "SEC Turns the Spotlight on Nasdaq Delisting Standards," published by Law360 [sub. req'd] on May 1, 2026. The article discusses the U.S. Securities and Exchange Commission’s decision to delay implementation of proposed Nasdaq delisting standards to allow for additional public comment, following concerns that the changes could expose smaller companies to market abuse and limit their ability to appeal delisting decisions. “It’s not the norm,” David says, referring to the SEC’s decision to pause its review. “And I think it reflects the fact that the comments, particularly the comments in opposition or expressing concern about the proposal’s implementation, gave the SEC quite a lot to think about,” he adds.
SEC, FINRA Cross-Border Crackdown Typifies Trump 2.0 Priorities
David Danovitch was quoted in the article "SEC, FINRA Cross-Border Crackdown Typifies Trump 2.0 Priorities," published by Bloomberg Law on November 4, 2025. The article discusses the growing US regulatory focus by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) on foreign issuers, aiming to crack down on fraud involving overseas companies listing on US exchanges. The approach is in keeping with the Trump administration’s general position toward Chinese businesses and other international competitors.   “There were parties basically hijacking IPOs and using them as vehicles for a pump-and-dump,” David says, referring to foreign issuers reporting questionably large returns despite a lack of sales activity to support such figures.  Nasdaq has proposed rules that would require companies based in China to raise at least $25 million in public offering proceeds to qualify for new listings, under the reasoning that a larger IPO would be more difficult to manipulate. “These are small firms, so our concern is that this could bankrupt a few firms or inhibit their ability to comply properly,” David comments. “You want your regulators to root out the crime and make sure investors here aren’t getting hurt.”
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News
Sullivan Advises BAFT and ITFA on Updated CRR Legal Opinions for the 2008 English Law Master Participation Agreement (MPA)

(London and New York) – Sullivan has advised BAFT (the Bankers Association for Finance & Trade) and ITFA (the International Trade and Forfaiting Association) on the publication of the two Capital Requirements Regulation (CRR) legal opinions covering the 2008 English law Master Participation Agreement (MPA). The newly released opinions comprise the EU CRR opinion on English law MPA 2008 and the UK CRR opinion on English law MPA 2008. They are intended

Viewpoints
The Org Chart Was Wrong: Entity Classification, Tax Due Diligence and Who Pays When an International Deal Springs a Leak

Douglas S. Stransky, partner and leader of the Tax Practice Group, has published a new post on the LexisNexis blog examining a recurring problem in cross-border acquisitions: entity classification errors discovered in tax due diligence. Using a hypothetical fact pattern in which a target’s foreign subsidiary never filed its check-the-box election, the post explains why classification mistakes persist, how a missing Form 5471 can leave the assessment statute open indefinitely under

Events
From Template to Transaction: What Works, What Doesn’t, What Banks Change

Geoffrey Wynne will present a breakout session, together with Paul Coles of Orbian, at ITFA's 52nd Annual International Trade and Forfaiting Conference, titled: “From template to transaction: What works, what doesn’t, what banks change.” The session will explore how banks and market participants use ITFA templates and guidance in live trade finance transactions. Using concrete case examples, the session will examine where standard documentation works well, where it needs to be adapted and

News
Sullivan & Worcester Selected for Massachusetts Lawyers Weekly “Empowering Women” Award

Boston, MA – Sullivan & Worcester has been selected by Massachusetts Lawyers Weekly for its "Empowering Women" award for the fourth consecutive year, recognizing the firm’s ongoing commitment to elevating, supporting, and empowering women in the legal profession. The annual recognition honors law firms that have demonstrated a strong commitment to supporting women in the profession by fostering opportunities for leadership, professional development, mentorship, and career advancement. “This honor underscores Sullivan’s long-term dedication

News
Sullivan Advises Olibra LLC on Acquisition by Somfy Group

Sullivan & Worcester represented long-term client Olibra LLC, the owner of the Bond smart-home connectivity platform, in its acquisition by Somfy Group, a global leader in the motorization and automation of openings and closures for homes and buildings. Bond will continue to operate independently under its existing leadership team while benefiting from Somfy's global resources, industry expertise and long-term investment. The transaction brings together Somfy's expertise in motorization and automation with

Viewpoints
SEC Approves Nasdaq's New $5 Million Market Capitalization Threshold for Continued Listing

On July 22, 2026, the Securities and Exchange Commission (the “SEC”) approved Nasdaq's amended proposed rule for a new continued listing requirement requiring Nasdaq-listed companies to maintain a minimum Market Value of Listed Securities (“MVLS”) of $5 million. The SEC approved the proposal as modified by Amendment No. 1 following a lengthy process that generated significant comments from market participants, issuers, investors, exchanges, law firms, and industry groups. The new rule

Events
The Next Generation: Three Emerging Leaders, Three Ideas

Simon Cook, in his role as ITFA's Head of Education, will jointly moderate a Q&A on “The next generation: Three emerging leaders, three ideas”, together with Charlie O'Mulloy, chair of ITFA’s Emerging Leader Committee and Associate Banker at EBRD, at ITFA’s 52nd Annual International Trade and Forfaiting Conference in Split, Croatia on September 9. The Q&A will follow the presentations made by the finalists of the 2026 ITFA Emerging Leader

Viewpoints
New York City Imposes New Pied-à-Terre Tax on Certain High-Value Homes

New York City Department of Finance (“NYC DOF”) recently began notifying property owners by mail that they may be subject to the City’s new Non-Primary Residence Surcharge, which will be imposed annually on certain high-value residential properties that are not used as primary residences.[i] Although the surcharge is commonly referred to as the “Pied-à-Terre Tax,” it applies to a broader range of non-primary residences. Receipt of a notice does not necessarily

Events
Financing the Future: From Defence to Critical Raw Materials

Geoffrey Wynne will participate in a panel discussion at ITFA's 52nd Annual International Trade and Forfaiting Conference alongside Ailsa McNeil, Director at Texel, and Hernan Mayol, Board Member and Representative of ITFA Americas and Chair of ITFA’s Latin America Regional Committee (LARC). The session, titled “Financing the future: From defence to critical raw materials,” will be moderated by Clarissa Dann, Editorial Director at Deutsche Bank AG.  The session will explore how trade

Viewpoints
SEC Stays Approval of Nasdaq’s $5 Million MVLS Continued Listing Requirement Pending Commission Review

On July 29, 2026, the Securities and Exchange Commission (the "SEC") notified Nasdaq that it had received notices of intention to petition for review of the SEC's July 22, 2026 order approving Nasdaq's proposed rule change requiring listed companies to maintain a minimum Market Value of Listed Securities ("MVLS") of $5 million. Pursuant to Rule 431(e) of the SEC's Rules of Practice, the July 22, 2026 approval order has been

News
Sullivan Advises BAFT and ITFA on Updated CRR Legal Opinions for the 2008 English Law Master Participation Agreement (MPA)

(London and New York) – Sullivan has advised BAFT (the Bankers Association for Finance & Trade) and ITFA (the International Trade and Forfaiting Association) on the publication of the two Capital Requirements Regulation (CRR) legal opinions covering the 2008 English law Master Participation Agreement (MPA). The newly released opinions comprise the EU CRR opinion on English law MPA 2008 and the UK CRR opinion on English law MPA 2008. They are intended

Viewpoints
The Org Chart Was Wrong: Entity Classification, Tax Due Diligence and Who Pays When an International Deal Springs a Leak

Douglas S. Stransky, partner and leader of the Tax Practice Group, has published a new post on the LexisNexis blog examining a recurring problem in cross-border acquisitions: entity classification errors discovered in tax due diligence. Using a hypothetical fact pattern in which a target’s foreign subsidiary never filed its check-the-box election, the post explains why classification mistakes persist, how a missing Form 5471 can leave the assessment statute open indefinitely under

Events
From Template to Transaction: What Works, What Doesn’t, What Banks Change

Geoffrey Wynne will present a breakout session, together with Paul Coles of Orbian, at ITFA's 52nd Annual International Trade and Forfaiting Conference, titled: “From template to transaction: What works, what doesn’t, what banks change.” The session will explore how banks and market participants use ITFA templates and guidance in live trade finance transactions. Using concrete case examples, the session will examine where standard documentation works well, where it needs to be adapted and

News
Sullivan & Worcester Selected for Massachusetts Lawyers Weekly “Empowering Women” Award

Boston, MA – Sullivan & Worcester has been selected by Massachusetts Lawyers Weekly for its "Empowering Women" award for the fourth consecutive year, recognizing the firm’s ongoing commitment to elevating, supporting, and empowering women in the legal profession. The annual recognition honors law firms that have demonstrated a strong commitment to supporting women in the profession by fostering opportunities for leadership, professional development, mentorship, and career advancement. “This honor underscores Sullivan’s long-term dedication

News
Sullivan Advises Olibra LLC on Acquisition by Somfy Group

Sullivan & Worcester represented long-term client Olibra LLC, the owner of the Bond smart-home connectivity platform, in its acquisition by Somfy Group, a global leader in the motorization and automation of openings and closures for homes and buildings. Bond will continue to operate independently under its existing leadership team while benefiting from Somfy's global resources, industry expertise and long-term investment. The transaction brings together Somfy's expertise in motorization and automation with

Viewpoints
SEC Approves Nasdaq's New $5 Million Market Capitalization Threshold for Continued Listing

On July 22, 2026, the Securities and Exchange Commission (the “SEC”) approved Nasdaq's amended proposed rule for a new continued listing requirement requiring Nasdaq-listed companies to maintain a minimum Market Value of Listed Securities (“MVLS”) of $5 million. The SEC approved the proposal as modified by Amendment No. 1 following a lengthy process that generated significant comments from market participants, issuers, investors, exchanges, law firms, and industry groups. The new rule

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