Back in March, I wrote about proposed revisions to Regulation A, commonly known as “Regulation A+”, which were designed to implement Section 401 of the Jumpstart Our Business Startups Act (JOBS Act). Since then, the SEC issued its final rule, which went into effect earlier in the month. Back in March, I had two main thoughts regarding the proposed rule. First, by proposing that Regulation A+ offerings preempt state registration requirements, the SEC had proposed a securities exemption that may actually prove useful and had a chance to be used in the real world (as opposed to the old Regulation A, which was rarely used). While this aspect of the proposed rule would be attractive to companies raising capital, it would also be controversial with state regulators and investor advocates, so I was concerned that in the final rule preemption of state laws would be rolled back. Second, I was concerned that companies that used Regulation A+ would likely be subject to ongoing Securities Exchange Act reporting (as a fully public company would be), which would reduce the attractiveness of the exemption. [Read more…]
On January 31, 2014 (revised February 4, 2014), the SEC issued a no-action letter to a group of attorneys who requested assurance on an issue that has long been on the minds of securities lawyers: are people who facilitate the sale of a controlling interest in a business involving a transfer of stock — which the Supreme Court has held to be a sale of securities under federal securities laws — required to register as broker-dealers under the Securities Exchange Act of 1934, with all of the attendant expenses and obligations?
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…]
On August 12, 2013, the crowdfunding platform AngelList submitted some really great and thoughtful comments to the SEC with respect to the SEC’s proposed Reg. D amendments related to new Form D filing requirements and enhanced penalties for failure to file (which you can read more about here). AngelList expressed its concern that the newly proposed Form D rules would result in “disastrous unintended consequences” for startups, observing that proposed rules reflect how sophisticated Wall Street issuers, investment banks, and law firms, rather than early stage businesses, engage in capital raising. [Read more…]