JOBS Act Regulatory Action Update


By Scott Andersen, CrowdfundBeat Guest Contributor, Principal at

During her keynote address at the 47th Annual Securities Regulation Institute on October 28, 2015, SEC Chairman Mary Jo White reminded us that the securities industry is an industry closely monitored by its regulators.  While the speech focused attention on the dramatic changes in capital raising now permissible through the JOBS Act, White made clear that enforcement investigations and actions were a critical part of the SEC’s monitoring of the industry.







White stated that enforcement investigations were open and focused on the Rule 506 offering space, focusing on discrete areas such as issuers’ failures to take reasonable steps to verify the accredited status of investors (required by Rule 506(c)), sales to unaccredited investors, and unregistered broker-dealer activity, as well as some instances of fraud.

White did not comment on Reg A investigations, as it is still too early to see the enforcement trends in this area, but we can expect a steady stream of investigations as the SEC police’s industry practices.

FINRA has also been active in the JOBS Act space.  It has been actively monitoring funding platforms websites to ensure the content standards of FINRA’s advertising rules are met.  FINRA has directly reached out to a number of its members to raise issues with marketing practices.

Recently, FINRA issued Regulatory Notice 15-32 which highlighted FINRA filing requirements for Reg A offerings.  In the Notice, FINRA emphasized that broker-dealers’ must meet FINRA advertising standards, including that any communication be fair, balanced and not misleading.  FINRA also suggested that it will carefully review Reg A offerings to ensure that FINRA members  comply with suitability standards.

FINRA shortly will assume a more central role in the JOBS Act industry as the primary regulator of broker-dealers and the newly created “funding portals,” which are required to participate in Title III crowdfunding capital raises.

With all the revolutionary changes triggered by the JOBS Act, the recent speech by White reminds us that the securities industry is highly regulated.  Both the SEC and FINRA are already active in this space, and it is only a matter of time before investigations and enforcement proceedings are constant as the industry continues to mature.  While the JOBS Act provides tremendous opportunity for capital raises, proper precautions and care should be employed to ensure that your capital raising under the JOBS Act is in compliance with the law and sufficient to meet the imminent regulatory scrutiny.



About Scott Andersen:
Scott is principal at and General Counsel of FundAmerica. He was most recently the Deputy Regional Chief Counsel at FINRA, and prior to that was the Enforcement Director at FINRA and the NYSE, Co-Chief of the Securities Prosecutions Unit of the NY Attorney General’s office, and Asst. Attorney General for the State of NY. He concentrates his practice on securities and regulatory law.


The information and materials in this article are provided for general informational purposes only and are not intended to be legal advice. The issues discussed include complicated areas of law and legal advice should be obtained from a securities attorney about your specific circumstances.




Tags: , , , , , , , , , , ,


This RSS feed URL is deprecated, please update. New URLs can be found in the footers at [...]

Oregon BusinessFor-profit giving normalized as crowdfunding maturesOregon BusinessNot so long ago, people might have thought twice about donating money to a for-profit company. But In the few years since crowdfunding debuted, thousands of companies have used online fundraising platfor [...]

The Daily Dot'Looking for Leia' creator launches crowdfunding campaign to expand into docuseriesThe Daily DotLooking for Leia creator Annalise Ophelian has created a crowdfunding campaign on Seed & Spark to raise funds to cover the new format of her project, which she sa [...]

New York PostToy tycoon leads crowdfunding effort to save Toys R Us brandNew York PostA budding campaign to buy Toys 'R' Us has hit a few bumps in the road, but its billionaire backer said he's just getting started. More On: toys “r” us · The best way to shop Toys [...]

ARL nowCrowdfunding Campaign Launched for Ballston Homicide VictimARL nowGiandoni, who would have turned 41 on Wednesday, was found dead in his home in Ballston last weekend. Police later determined his death to have been a homicide, though few details have been revealed about the cir [...]

Bitcoinist4NEW To Implement Ocular KYC solution before completing ...BitcoinistLondon, England. 4NEW announced today that it will pause the current fundraising efforts on March 27, three days earlier than planned in order to allow the team to complete implementation of their KYC/Anti- [...]

Allentown Morning CallBillionaire toy executive hopes to raise $800 million via crowdfunding to save Toys R UsAllentown Morning CallIsaac Larian, the billionaire toy executive behind Bratz, Little Tikes and L.O.L. Surprise! dolls, wants to save Toys R Us. (Christopher Lee / Bloomberg) [...]

Which of these worthy crowdfunding causes wins your vote?Jacaranda FMWhich of these two worthy candidates do you think deserves a crowdfunding dream-come-true? crowdfunding Supplied. We all know the feeling. Your goal is in sight, but you just need one last push. If you could get that [...]

Honolulu Star-AdvertiserIndie film 'Waikiki' seeks crowdfunding boostHonolulu Star-AdvertiserDanielle Zalopany, right, stars as Kea in the independent feature “Waikiki,” set for release later this year. Zalopany is a Po'okela Award-winning actress and has appeared on CB [...]

KGO-TVGroup launches crowdfunding campaign for homeless on San ...KGO-TVTake it to the Streets has launched a $50000 crowdfunding campaign to provide housing and services for homeless young adults.and more » [...]

CFB Finance


  • 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 |