One year, 7 months, and 6 days have passed since President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. The product of rare bipartisanship, the JOBS Act was praised on both sides of the aisle as improving access to capital for US small business, which could in turn drive economic growth.1 While…
Tag: Securities and Exchange Commission
Title II of JOBS Act Goes Into Effect, Creating Exciting New Opportunities for Start-ups
On Monday, September 23, 2013, Title II of the Jumpstart Our Business Startups Act (JOBS Act) went into effect allowing start-up companies to seek equity investments publicly without having to register ownership shares for public trading. Title II is a significant aspect of the JOBS Act, a post-recession initiative to stimulate the American economy, in…
Risky Investment for the Fantasy Football Guru
On October 17, 2013, Fantex Holdings launched an “all-new marketplace that allows investors to buy and sell Fantex, Inc. stock linked to the value and performance of the brand of a professional athlete.”1 The Initial Public Offering will be called a “Fantex Series Arian Foster Convertible Tracking Stock.”2 The offering has been subject some confusion….
SEC’s Focus on Broker-Dealer Registration
SEC has recently made broker-dealer registration an area of focus for private fund managers. This is bad news for the private equity industry, as the burdens and costs of registration and on-going compliance with SEC requirements are substantial. The regulatory framework starts with Section 15(a) of the Exchange Act, which requires that persons engaged in…
This Isn’t What We Voted For: Will the JOBS Act Spur Fraud?
In an era of oversight, regulations are being reigned in to help startups obtain funding. The JOBS Act, signed into law in 2012, increases investment opportunities. Specifically, the Act permits “crowdfunding” through a provision allowing sales of certain unregistered securities in small amounts. Effective crowdfunding depends on a startup company’s ability to target the right…
The SEC’s Lift on the Ban on General Solicitation
On July 10, 2013, the Securities and Exchange Commission lifted an 80-year old ban on the general solicitation of private securities offerings to individual investors. The decision came as a response to Section 201(a) of the Jumpstart Our Business Startups (JOBS) Act of 2012, which amends Rule 506 of Regulation D under the Securities Act…
Zombies of the Private Equity Industry Pt. I
Private equity funds have begun to slowly show the positive results of fundraising efforts – the capital raised in 2013 is up 20% compared to what was raised in the same period in 2012.1 Although the results of industry fundraising are improving, the amount of time needed to raise those funds is continuing to grow….
General Solicitation and the New Wave of Private Securities Offerings
What makes a sale of securities a “private” offering as opposed to a “public” offering? The primary distinction is that firms who make public offerings seeking equity investors must register with the Securities and Exchange Commission (SEC). On the other hand, private securities offerings are defined as those that do not need to formally register…
The SEC Will Remain Open During the Government Shutdown
According to SEC spokesman John Nester, “The SEC will be able to stay open in the event of a funding lapse because we [the SEC] have carryover funds available.”1 According to Business Insider, “John Nester wouldn’t say how much cash the agency has,” however, the SEC issued a contingency plan for operating in the event…
The Dodd-Frank Act – Volcker Rule: More Strain on Foreign Banks Operating in the U.S. Today
The Dodd-Frank Act was enacted on July 21, 2010 after intense debate within the investment banking industry and the political realm in Washington D.C. to address the consequences of the “Lehman Shock” and other lessons learned from the 2008 financial crisis that affected the world economy.1 One area that congress did not consider in depth…