JOBS Act Issue - Introduction
J. Robert Brown Jr.
University of Denver Sturm College of Law
April 29, 2013
U Denver Legal Studies Research Paper No. 13-26
The federal securities laws have at their core the protection of investors. At the same time, the Securities and Exchange Commission (“SEC” or “Commission”) is expected to promote active and liquid capital markets. In a narrow sense, the two goals sometimes appear to be in conflict. Protecting investors often adds expense to the capital raising process. Providing adequate information or ensuring a sufficient level of sophistication can, on the margin, price some companies or investors out of the market. In a broader sense, however, the two goals are complementary. Without sufficient protection, investors will be less inclined to invest. The depth and liquidity of the markets will suffer.
The JOBS Act swung the other way, focusing primarily the reduction of costs in the capital raising process. The Act lifted the ceiling on offerings under Regulation A, authorized general solicitations for private placements under Rule 506, and increased the number of shareholders of record needed to trigger mandatory registration under the Securities Exchange Act of 1934. The JOBS Act included an exemption from registration for offerings made over crowdfunding platforms, with investors mostly protected by a cap on the total amount they could invest.
The DU Online Law Review has devoted an entire issue to the JOBS Act. The content came from eight students under faculty supervision. The papers each analyzed a specific provision in the JOBS Act and relied upon a common format. The papers addressed the law as it existed on the eve of the JOBS Act and analyzed the changes implemented by Congress, including the relevant legislative history. Each paper offered practical insight into the operation of the selected statute.
The papers encompassed significant portions of the JOBS Act. Three addressed crowdfunding (Lindsay Anderson Smith, Crowdfunding and Using Net Worth to Determine Investment Limits, Lina Jasinskaite, The JOBS Act: Does the Income Cap Really Protect Investors? and Michael W. Shumate, Crowdfunding and State Level Securities Fraud Enforcement under the JOBS Act), two addressed the changes to the private placement process under Rule 506 (Erica Siepman, The JOBS Act and the Elimination of the Ban on General Solicitations and Samuel Hagreen, The JOBS Act: Exempting Internet Portals from the Definition of Broker-Dealer ), and one addressed the number of shareholders of record that trigger registration with the SEC (Susan Beblavi, The JOBS Act Title V: Raising the Threshold for Registration), emerging growth companies (Will McAllister, The JOBS Act Title I: The “On-Ramp” to IPOs for Emerging Growth Companies) and Regulation A (David Rodman, Regulation A , the JOBS Act, and Public Offering Lite).
Number of Pages in PDF File: 4Accepted Paper Series
Date posted: April 30, 2013
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