Thoughts on the Proposed Crowdfunding Regulations

On October 23, 2013, the Securities and Exchange Commission issued proposed regulations to implement Title III of the JOBS Act, which will allow for the public sale of securities using crowdfunding under an exemption from registration under securities laws. [Read more...]

First Enforcement Action Taken Against Crowdfunding Site

For the first time, regulators are taking action against one of the many crowdfunding sites that have sprung up since the passage of the JOBS Act.  The Ohio Division of Securities issued a notice of intent to issue a cease-and-desist order against the Cincinnati-based crowdfunding platform SoMoLend and majority owner/CEO Candace Klein in June. If issued, the order will shut down SoMoLend. [Read more...]

The JOBS Act, a Year Later – Part 5: Crowdfunding

This post is the fifth in a series examining the impact of the Jumpstart Our Business Startups Act (or JOBS Act) one year after its passage and focuses on the provisions related to crowdfunding.

Previously in this series, I discussed the progress of implementing the JOBS Act, specifically Titles I and II.   In this fifth post, I will continue that discussion by focusing on Title III, which creates a new exemption from the federal securities registration requirement for certain small offerings conducted over the internet, a practice commonly known as “crowdfunding.” [Read more...]

The JOBS Act, a Year Later – Part 1: Introduction

It’s been almost a year since Congress passed the Jumpstart Our Business Startups Act (or JOBS Act). At the time, the passage of this bill was greeted with significant enthusiasm from the start-up community. Among other things, it provided for a crowdfunding exemption from securities registration requirements and a repeal of the prohibition on general solicitation of investors in connection with certain private offerings. A year later, how do things stand? In this first of a series of posts, I’ll explore how implementation of the JOBS Act has progressed and what we might expect in the future. [Read more...]

FINRA Takes a Small and Extremely Tentative Step Towards Implementing Crowdfunding

Many entrepreneurs have been growing increasingly impatient with the SEC. Not only is the SEC about to be 6 months late in implementing the loosening of the general solicitation requirement of Regulation D, which was mandated by the JOBS Act, but it is now nearly certain that the SEC will also miss its deadline to issue regulations to implement the crowdfunding provisions of the JOBS Act as well. Under the JOBS Act, the SEC was given until January 2013 to issue the implementing regulations and since the new year is right around the corner, and we haven’t even seen proposed regulations, we know it will be a long time until the regulations are finalized and companies can begin to use the new crowdfunding exemption. That said, on December 7, a small step was taken towards implementing the crowdfunding law. [Read more...]