LexisNexis® Legal Newsroom
Steps to Determine if an Investor is Accredited

Private funds will be able to advertise and solicit for investor, provided all of the investors are " accredited investors ." The Jumpstart Our Business Startups Act will dramatically change the way capital raising for private funds operates. The drawback is the loss of 35 non-accredited...

Dick Phillips, Alan Berkeley and Stan Keller Discuss the JOBS Act.

On this edition, Dick Phillips and Alan Berkeley of K&L Gates and Stan Keller of Edwards Wildman discuss the JOBS Act (Jumpstart Our Business Startups Act), which was signed into law April 5 by President Obama. They provide an overview of the legislation and explore some of the controversies of the...

Crowdfunding Under the JOBS Act: The Bottom Line Impact on Private Equity Issuers and Market Intermediaries

by Jonathan B. Wilson and Dianne L. Trenholm Excerpt: On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the "JOBS Act"), H.R. 3606, into law calling it "a potential game-changer" for startup companies. President Obama signed the JOBS Act just...

Country Specific Issues in EB-5 Practice – China

The People's Republic of China is one country that EB-5 practitioners and related EB5 professionals cannot afford to neglect. The top 5 countries [1] in 2012, for EB-5 alien entrepreneurs are: China, South Korea, Taiwan (region), Iran and Venezuela. Chinese investors account for an overwhelming...

Construction Jobs Count in EB-5 Projects: Can We Count the Jobs with Confidence?

For the more seasoned EB-5 practitioner, memories of when construction jobs could not be counted towards the job creation requirement remain vivid. While it is true that the some construction jobs may now be counted, with the plethora of real estate projects being introduced and managed by Regional...

JOBS Act Heralds New Era for Startup and Emerging Growth Company Financing

by Karl J. Ege, Martin E. Lybecker, Danielle Benderly, and James T. Carroll The JOBS Act's stated purpose is to spur job creation and economic growth by improving access to capital for emerging growth companies. To do so, the JOBS Act will make some of the most significant changes to the U...

A Masterstroke of Some Kind: Crowdfunding and the JOBS Act

"Everyone agrees the title was a work of pure genius," says Dick Phillips of K&L Gates in a recent podcast , referring to the Jumpstart Our Business Startups (JOBS) Act. "It's impossible to vote against in an election year." When a law is so well named, it's important...

EB-5 Practice under SEC Proposed Rules to Implement the JOBS Act

Regional Centers [1] lawfully raise capital within the EB-5 Program [2] pursuant to one or more exemptions from registration set forth in the United States securities laws. The most commonly utilized exemptions in EB-5 offerings are Regulation D (the Private Placement exemption) and Regulation S...

New Leadership in China and EB-5 Practice

The seven-member Politburo Standing Committee in China greeted the world in the Great Hall of the People on November 15, 2012 in Beijing. What does the new leadership in China mean to EB-5 practice? Most believe it is too early to tell. However, a few welcoming changes have already taken place. ...

SEC Delays Rules on Key EB-5 Section in JOBS Act

When the JOBS Act was enacted in April 2012, it raised a significant amount of excitement in the EB-5 community. At the time, there was a general consensus that the Act could change the landscape of EB-5 private offerings. However, the Securities and Exchange Commission's (SECs) indefinite delay...

How the ACCC Scandal has Disturbed the EB-5 Market in China – Current Market Trends and Updates

Introduction: On February 6, 2013, the Securities and Exchange Commission (SEC) charged the EB-5 project A Chicago Convention Center (ACCC) and its principal Anshoo R. Sethi with securities fraud. The project was marketed primarily in China, with great pomp and fanfare. It offered 499 limited...

JOBS Act 2.0 Bills Officially Pass House Committee

It took until just before Memorial Day, but apropos timing as the House Financial Services Committee, on May 22, officially approved 11 bills to help small businesses with capital formation and growth. Many on the Hill are fashioning this group of bills JOBS Act 2.0, as a natural follow to the Jumpstart...

Strong SEC Small Business Forum

As I have for many years, last week I attended the annual SEC Government-Business Forum on Small Business Capital Formation. This Congressionally mandated event leads with a few panels followed by breakout discussion groups that develop formal recommendations to the SEC staff and commissioners to improve...

The SEC on Capital Formation: Graded Incomplete – Commissioner Gallagher

Last year the IPO market was overheating – a record number of initial offerings were conducted. Nevertheless, SEC Commissioner Daniel Gallagher gives the SEC a grade of “incomplete” in the area of capital formation in recent remarks. Commissioner Daniel M. Gallagher, “Grading...

New Era of Capital Raising: Sorting Through the JOBS Act’s New Capital Raising Rules

by David Carroll Since the enactment of the Jumpstart Our Business Startups Act (the “JOBS Act” ) in 2012, the Securities and Exchange Commission (“ SEC “) has slowly been making its way through the titles to the JOBS Act to promulgate the final regulations for implementation...

New Era in Private Capital Raising – Opening Up General Solicitation and General Advertising

by David Carroll The next few years may be the largest watershed event in opening up private equity capital since the 1980s when Regulation D was first published by the Securities and Exchange Commission (“SEC”). By allowing general solicitation and general advertising in private offerings...

Why You Can’t Really Include Non-Accredited Investors in Rule 506 Offerings

One common misconception I encounter among startups is the idea that companies raising capital can include non-accredited investors in Rule 506[1] offerings. While it is technically true that a Rule 506 offering may include up to 35 non-accredited investors, what is often missed is that it is not really...

State Challenges of Reg A+ Move Ahead

As reported by Crowdfund Insider , Massachusetts and Montana filed their first “Opening Brief” in their case against the SEC trying to invalidate the regulations passed under Regulation A pursuant to the Jumpstart Our Business Startups (JOBS) Act of 2012. Essentially, they say the SEC overstepped...

FINRA Issues Regulation A+ Filing Guidance

As we still await the first completed Tier II Regulation A public offering, and rumors are swirling that several are getting close, the Financial Industry Regulatory Authority (FINRA), which regulates broker-dealers, has confirmed what most already know. In a release a few weeks ago, they clarified that...

General Solicitation Restrictions for Private Placement Issuers

On August 6, 2015, the Securities and Exchange Commission (the "SEC") issued a number of Compliance and Disclosure Interpretations (" CDIs ") related to the issue of “general solicitation” (or “general advertising”) as it pertains to issuers seeking to raise...

SEC Advisory Group Recommends Private Placement Finders Be Exempted From Broker Registration

Yesterday, the SEC’s Advisory Committee on Small and Emerging Companies, comprised of a number of smart and thoughtful people I know, made some terrific recommendations to the Commission. The biggest, something for which many have been waiting for quite a while: that private placement finders,...

Placement Agents: Part I: What Are They, What Do They Do and on What Terms?

Raising money for private companies can be a frustrating and stressful experience. Without the kind of access to the investing public that a public company enjoys, and given the kinds of restrictions on who can invest in many types of private placements, finding appropriate investors can be a daunting...

Placement Agents: Part II: When Should You Use a Placement Agent, and How to Pick the Right One?

At this point, having discussed the services a placement agent can provide, the kinds of compensation used, and other important terms to keep an eye on when negotiating for the services of a placement agent, there is still the threshold matter of determining whether using placement agents makes sense...

SEC Adopts Final Crowdfunding Rules

On October 30, 2015, by a 3-1 vote, the SEC adopted final rules to permitting small companies to raise funds by selling shares to the investing public through crowdfunding offerings conducted on Internet fundraising portals. In this long-awaited vote, which represented the last remaining significant...

Let’s Give Title III Crowdfunding a Chance

It was in many ways the centerpiece of the Jumpstart Our Business Startups (JOBS) Act of 2012. At the signing ceremony all the President could talk about was the idea of “bringing Wall Street to Main Street.” And while the JOBS Act has many other terrific provisions, including the new Regulation...