Disclosure

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The Devil’s Advocate


In which the curmudgeonly old sod puts the world to rights.

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Favourite prospectus risk disclosure, from the coinbase IPO:

“As we expand and localize our international activities, we have become increasingly obligated to comply with the laws, rules, regulations, policies, and legal interpretations both of the jurisdictions in which we operate and those into which we offer services on a cross-border basis.”

It’s hard, in other words, to make money when you have to do things by the book.

Hat tip to Marc Rubinstein’s Net Interest blog for fishing this one out of the morass — no-one else seems to have spotted it — but the JC got on the Google and discovered that, in time-honoured tradition, this is simply cribbed from an existing disclosure from a 2019 disclosure document by PayPal:

“As we expand and localize our international activities, we have become increasingly obligated to comply with the laws of the countries or markets in which we operate.”

It turns out that expression, in various iterations, has been popular with start-up stock offerings for a while now. Most omit the killer adverb “increasingly”, which makes the statement a whole lot less fruity. Our deep market research[1] reveals that this expression first entered the argot of securities offerings in 2006 with eBay’s innocuous statement:

“As we expand and localize our international activities, we become obligated to comply with the laws of the countries in which we operate.”

Within a decade, eBay came to regard compliance with local rules as discretionary, which makes their statement a whole lot more fruity:

As we expand and localize our international activities, we may become obligated to comply with the laws of the countries or markets in which we operate.

  1. This is code amongst the secret association of bloggers for “I Googled it.”