Thursday, April 30, 2015

Invest Tennessee Exemption Rulemaking Hearing

Last week, Cutwater Law’s founder, Bob Zeglarski, attended a public hearing regarding regulations being proposed by the Tennessee Department of Commerce and Insurance’s Securities Division pursuant to the Invest Tennessee Exemption (ITE). The hearing was held to allow the public to weigh in on the proposed regulations.
Tennessee Department of Commerce and Insurance’s Securities Division

Zeglarski appeared in support of the Divisions new rule after submitting the following letter earlier in the month (text follows):

Sent via Email
Sarah Branch, Esq.
Assistant General Counsel

Securities Department of Commerce and Insurance 
500 James Robertson Parkway, 8th Floor 
Nashville, TN 37243

NEW RULE NUMBER 0780-04-02-.17 (“New Rule”)

Dear Ms. Branch,

Please accept this letter in support of the New Rule. I welcome the opportunity to share my viewpoint with the public at the Rulemaking Hearing on April 22, 2015. This letter represents my own views as a Tennessee securities lawyer who advises private and public emerging growth companies.

During the past 10 years, I have primarily helped businesses leverage capital to grow. In my experience, scarcity of capital is the greatest challenge faced by emerging growth companies, particularly those with total annual gross revenues of less than $10 Million. As a result, I have become an advocate for responsible deregulation of securities laws that facilitate small capital formation.

I support the New Rule because it codifies best practices for compliance with the intrastate exemption from federal securities registration requirements, a rarely utilized exemption that has numerous pitfalls. By establishing rules that require a conservative approach, issuers will be more likely to avoid such pitfalls. The New Rule will, therefore, protect our new marketplace, helping to keep transaction and capital costs low for Tennessee companies that use the Invest Tennessee Exemption to raise capital.

The Invest Tennessee Exemption will help most emerging growth companies in Tennessee access the capital they need to succeed. While late stage emerging growth companies can absorb the large transaction costs required to access capital in a national securities market, most emerging growth companies cannot. Instead, they must navigate a private marketplace that limits its sources of capital to banks, professional investors, and certain wealthy individuals that, all together, constitute only 1% of the US population. The Invest Tennessee Exemption provides smaller issuers with a new avenue to local public capital without the expense of registration. Having greater access to capital, small issuers will be better positioned for growth.

In addition to providing Tennessee companies with a new source of capital, the Invest Tennessee Exemption creates an opportunity to build a stronger local market for capital, spur local economic development, and create new jobs. One only needs to review the historical record to know that this vision is feasible. Before the passage of landmark securities legislation in the 1930s, local and regional stock markets flourished in the United States. They expanded local economies and helped create new jobs.

The Invest Tennessee Exemption contributes to a movement, particularly in the South, that will help fix certain small capital formation problems that have emerged over the last 100 years. Federal regulations have limited small issuer access to only the wealthiest investors, while virtually eliminating their access to public markets. At the same time, national marketplaces, like the New York Stock Exchange, have maximized economies of scale to drive down transaction costs, making local capital less economical. The Invest Tennessee Exemption solves the problem of access and makes small capital formation economically feasible on a local level.

The Invest Tennessee Exemption will also have a positive impact on our broader economy. The consolidation of our public markets has created a major market failure that adversely impacts our economy. By catering to the largest companies, the most lucrative clients, national securities marketplaces have dangerously narrowed the field of publicly listed companies. Today, most of our national wealth is yoked to the performance of national public capital markets that list less than 1% of all US companies, a very small group of companies that all have enormous market capitalizations. As a result, the failure of one can shock the entire system. The Invest Tennessee Exemption will help to diversify our public markets, reducing this systemic risk.

Thank you for proposing a rule that protects our local capital market, encourages local economic growth, and strengthens our national economy.

Enclosed please find my proposed revisions to the New Rule. Thank you.


/s/Robert Zeglarski
Robert Zeglarski, Esq

cc: Daphne D. Smith, Assistant Commissioner for Securities (via email

Suggested editorial changes to Chapter 0780-04-02-.17 Invest Tennessee Exemption:
  1. In §3(a)(1)(i), insert “deemed to be” after “An issuer shall be...” to harmonize the language with Rule 147.
  2. Strike §4 and replace it with the following language that is more consistent with the Securities and Exchange Commission’s Compliance and Disclosure Interpretations, released October 2, 2014:
    “(4) Use of the Internet. An issuer shall not use the Internet to offer or sell securities pursuant to this exemption unless such issuer limits communications that are offers only to those persons having Internet Protocol, or IP, addresses that originate from the state of Tennessee and prevents any offers to be made to persons having IP addresses that originate in a state other than Tennessee. The issuer shall maintain a log of all user IP addresses that have viewed issuer communications that are offers.”
  3. With respect to the established authority set forth at the end of the New Rule, strike all references to federal regulations, which provide no source of state rulemaking authority. 
Robert Zeglarski

Monday, April 27, 2015

Cutwater Law Opening Office On Legendary Music Row

Cutwater Law, PLLC, announced today that it is opening a new office on May 1, 2015 in Nashville on Music Row. The fast-growing, business and entertainment law firm was launched in October 2014.

Cutwater Law ( brings to Music Row its deep experience representing public and private companies, business executives, accredited investors, angel investors, venture capital funds, hedge funds, and private equity funds. Cutwater Law also represents high-profile entertainment industry projects and individuals such as television, film and new media productions, their producers and talent, as well as recording artists.
Location of Cutwater Law’s Music Row Office
Location of Cutwater Law’s New Office
“Over the past year, I have observed an increase in interest among professional investors seeking opportunities in and around entertainment,” says Founder, Robert Zeglarski, Esq. “It’s the right time for Cutwater Law to establish a formal presence on Music Row, a globally recognized entertainment hub.”

The firm represents clients in a broad range of corporate and securities matters, including contract negotiations, business formations, the purchase and sale of closely held businesses, mergers, acquisitions, as well as public and private securities offerings.

Robert Zeglarski, Esq.
Robert Zeglarski, Esq., Founder of Cutwater Law PLLC
Robert Zeglarski, Esq., is licensed to practice law in the states of New York, New Jersey, and Tennessee. He graduated from Seton Hall University School of Law in 2004. Zeglarski also earned a BS from Wake Forest University and an MS from the University of South Carolina’s School of Public Health. He is a member of the Nashville Bar Association’s Continuing Legal Education Committee and the Nashville Rotary Club.

Cutwater Law’s Music Row office will be located at:

20 Music Square West
Nashville, TN 37203
Phone #: 615-933-3545

For more information about the firm, visit or contact Robert Zeglarski at 615-933-3545.

Friday, April 24, 2015

TNEMC Hosts China Film Producers' Association Members

On April 24, 2015, the Tennessee Film, Entertainment and Music Commission (TFEMC) hosted a panel presentation providing an introduction and overview of Tennessee’s entertainment industry that featured TFEMC Executive Director Bob Raines, Film Com Chairman Andy van Roon, Senior Vice President of Affirm Films/Sony Pictures Entertainment Rich Peluso and Cutwater Law Founder Bob Zeglarski.   
Bob Zeglarski
Wang Fenglin, Vice President of the China Film Producers’ Association (second from right) hears a presentation from TFEMC Executive Director Bob Raines
The delegation was organized through the China Film Producers’ Association, a trade organization of Chinese film production companies that offers a link between the Chinese government, Chinese film producers and the Chinese people to insure Chinese films’ direct and efficient access to the market.  The organization also helps strengthen international exchange, develop international cooperation and promote Chinese films in foreign countries.  
Members of the delegation visiting Nashville include top ranking officials from the China Film Producers’ Association, Beijing Forbidden City Film Co., Beijing Huaying Century National Film and Television Production Center, Heilongjiang Yuetong Culture Media Co., Ltd., Beijing Li Yanqiu Culture and Art Studio Co., Ltd., and Legends of the Fall (Beijing) Culture Co., Ltd.
Tennessee: A Sino-Us Co-Production Destination
China is home to a rapidly growing entertainment industry with the world’s second largest box office behind only the U.S.  In February of this year, China beat the U.S. box office for the first time ever with $650 million in revenue compared to $640 million in U.S. revenue according to entertainment research firm EntGroup.  Recently, the U.S. movie “Furious 7” had the biggest opening day and opening week ever for any film in China.

Robert Zeglarski