The Federal Reserve has issued a series of legal forms and agreements with accompanying instructions that must be submitted by borrowers and lenders that have been deposited at main Street New Loan Facility, Main Street Expanded… On May 21, 2018, the U.S. Supreme Court, in a long-awaited decision, ruled that labor arbitration agreements with class actions waived individual arbitration are enforceable under the Federal Arbitration Act… It is interesting to note that some of these studies have found that staggered locking agreements may actually have more negative effects on an action than those with a single expiration date. This is surprising, as staggered locking chords are often seen as a solution for post-lock-up dip. Although lockout agreements are not required by federal law, sub-managers will often require executives, venture capitalists (VCs) and other business insiders to sign lockout agreements to avoid undue sales pressure in the first few months of trading after an IPO. In May 2012, Facebook went public in an IPO signed by a consortium of investment banks („Underwriters“) led by Goldman Sachs -Co., Morgan Stanley -Co., LLC and J.P. Morgan Securities LLC (Together „Lead Underwriters“). As part of the IPO, the lead underwriters entered into conventional lock-in agreements with Facebook shareholders prior to the IPO. These lock-in agreements prevented shareholders, prior to the IPO, from otherwise selling or divesting their Facebook shares for a period of time after the IPO, without first obtaining the approval of the Lead Underwriters.
As the court noted, these lock-in agreements are common in IPOs because they allow potential investors to „wait for an orderly market without the risk of a significant sale of used shares, which depresses the share price before the pricing of newly offered shares has subsided in the market.“ Before a company can go public, insurers require insiders to sign a blocking agreement. The objective is to obtain the stability of the company`s shares in the first few months following the offer.