SEC To Rule on JOBS Act July 10th

NEW YORK (TheStreet) –The JumpStart Our Businesses Act, or JOBS Act, needs a jumpstart itself. Progress, however, finally seems to be happening as the SEC is scheduled to hold an open meeting on July 10 to vote on the Title 2 portion of the Act. It isn’t the crowdfunding portion that many are anxiously awaiting, but it is a sign of action which is giving the crowdfunding crowd a feeling of hope. Title 2 was supposed to be completed 90 days after the enactment of the JOBs Act, but has only gone so far as a set of proposed rules dating back to August of 2012.

This portion of the JOBS Act addresses the approval of advertising for securities sales to accredited investors and requiring the issuers take steps to make sure the investors are indeed accredited. The SEC received 220 comments regarding Title 2, with the majority opposed to the proposal due to fears of fraudulent offerings. The other group was very much in favor of the proposed rules saying it would boost capital formation, but did request specific verification methods to make sure they were satisfying that requirement.

Security and Exchange CommissionBob Carbone, co-founder of CrowdBouncer, believes there is internal pressure for the SEC to move forward. “There is an appetite within the SEC to make it a reality,” he said. “If they don’t accept the rules as proposed, then they will have to start with new rules.” Carbone thinks the proposed rules are fairly straightforward and reasonable. “It’s long overdue and I think they want it to work,” he added.

The question is whether the delay has hurt the JOBS Act. A new study by BDO USA found that investment bankers have lost faith in the Act. Last year, 55% believed it would have a positive impact on IPO activity. Now only 29% have that belief. More than two-thirds (68%) predict the law will never achieve its desired goal of increasing the number of businesses going public. Some 19% believe that crowdfunding would negatively impact the IPO market.

Crowdfunding sites like WeFunder are struggling with how best to protect potential investors. WeFunder CEO and CoFounder Nick Tommarello said his company does due diligence on the companies they feature but wonders whether investors should also conduct their own research. “They shouldn’t just take our word for it,” said Tommarello. “They should get involved and learn about the companies personally.” Many crowdfunders believe that will be the beauty of crowdfunding – i.e. the crowd will “out” bad offerings. Tommarello wonders whether too much protection harms a potential company’s chance to raise capital.

One group that urges caution is the North American Securities Administrators Association. President Jack Herstein wrote in August to the SEC that the rules are not as straightforward as some suggest, but actually quite complex. They urge that the SEC not give in to the pressure to act quickly. Herstein points out that in 2011, 200 actions were taken against fraudulent Rule 506 offerings. He goes on to mention the Justice Department’s indictments against Provident Royalties in connection with a $485 million fraud against 7,700 investors in private placements.

Carbone said if the rules are accepted as proposed it could be implemented within 30 to 60 days and deal flow will begin with the companies that have been established and waiting for the green light. Tommarello said, “I strongly think they will pass the rules. I don’t think they’d schedule the meeting if they didn’t think it wouldn’t happen, but it may be August 12th before implemented.”

An SEC spokesperson would only say the implementation date will be noted in the proposal put before the meeting. For many, it’s been a long wait to jumpstart the act.

[Source: Debra Borchardt @ The Street]

http://www.thestreet.com/story/11973243/1/sec-to-rule-on-jobs-act.html

Tags: , , ,

HEADLINE NEWS

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

Times of IndiaPT Usha takes to crowdfunding to run schoolTimes of IndiaCHENNAI: Legendary athlete PT Usha, called 'Payyoli Express' by her fans, has taken to crowdfunding and raised Rs 20 lakh to train budding girl sprinters and runners at her school in the hope of turning t [...]

Crowdfund InsiderNew Investment Crowdfunding Platform Launches in North Carolina as Full Stack Platform Including Intrastate NC ...Crowdfund InsiderUnder NC PACES, or “North Carolina Providing Access to Capital for Entrepreneurs and Small business Act,” crowdfunding legislation, issue [...]

ChronicleLiveNo need for banks as North East businesses turn to crowdfundingChronicleLiveCrowdfunding has developed a reputation for helping weird and wonderful projects become a reality. But while creative projects have utilised crowdfunding for some time, more and more North East bu [...]

Crowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you cou [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |