By David N. Feldman , Partner of Richardson & Patel
Last week the US Securities and Exchange Commission issued an “investor bulletin” about its amendments to Regulation A made under the Jumpstart Our Business Startups (JOBS) Act of 2012. The introduction to the bulletin makes clear the changes were made “to enhance the ability of smaller companies to raise money.” One hopes that people actually read these, but who knows. Many of these “bulletins” are really more warnings about areas of investment concern. For cxample, in recent years SEC has issued bulletins about cannabis companies (mostly talking about the risks of investing in companies that are not SEC reporting) and reverse mergers (same concern).
With this bulletin, however, it really does seem like a straightforward informative piece about a new investment opportunity. They talk about the brilliantly designed multiple tiers of investment (Tier II has more reporting and disclosure obligations but avoids state blue sky oversight of the offering), walks through limitations on investments by non-accredited investors, and reminds folks to actually read the offering statement that the SEC will be carefully reviewing and approving.
As each step in the process of the Reg A amendments (Tier II is now generally referred to as Regulation A+) develops, we are seeing an SEC that appears truly willing, even anxious, to encourage smaller companies to use the new amended rules. This is good. Now we continue the education effort on Wall Street as the sharp minds sharpen their pencils to put deals together under the new rules.
David N. Feldman is a transactional attorney whose law practice focuses on corporate and securities matters and general representation of public and private companies, investment banks, private equity firms and high net worth individuals.
He also actively advises on mergers and acquisitions and private equity, debt, venture capital and other financings. David will be joining the international law firm of Duane Morris (www.duanemorris.com) as a corporate partner in their New York office as of July 14, 2015.