Ten days ago, the D&O Diary noted the Jumpstart Our Business Startups (“JOBS”) Act’s second birthday. And despite its youth, and the fact that the SEC has yet to fully implement it, Congress is already considering amendments. D&O Diary comments, for example, that the Act’s crowdfunding provisions have been attacked as burdensome while the accredited investor rules are viewed as overly restrictive. View the D&O Diary’s discussion here.
Last month, Columbia University Law Professor John C. Coffee Jr. summarized some of the changes proposed by the “JOBS Act II” and testified before Congress on those proposed amendments. View Coffee’s blogpost for the CLS Blue Sky Blog here.
At the end of March, Keith F. Higgins, the SEC’s Director of the Division of Corporation Finance, discussed the JOBS Act’s changes to Regulation D, noting the number of new offerings being conducted under new Rule 506(c), which permits the use of general solicitation. Higgins summarized the rule’s requirements for verifying accredited investor status and emphasized its principles-based approach. Higgins also addressed the Commission’s accredited investor definition before parsing proposed Regulation A+. View the text of Higgins’ speech here.
One author who has taken issue with the SEC’s definition of “accredited investor” is University of Utah law professor Larissa Lee, who suggests a new accredited investor standard which employs a mixture of wealth, financial sophistication, and diversification to determine accredited investor status. View Lee’s law review article here.