Regulation Crowdfunding, promulgated under Title III of the JOBS Act, is a relatively new method companies can use to raise capital.1 Reminiscent of donation-based crowdfunding platforms such as Kickstarter, Regulation Crowdfunding permits companies to raise up to $1 million through either a funding portal or broker-dealer from a wide range of investors, including non-accredited investors.2…
Tag: Securities and Exchange Commission
The Benefits and Drawbacks of the JOBS Act
In April 2012, the Jumpstart Our Business Startups Act, better known as the JOBS Act, was signed into law, receiving bipartisan support. The JOBS Act is aimed at reducing securities regulations for emerging growth companies to help these companies have access to the capital markets. In theory, the Act seems to have a laudable goal:…
Implications for “Unicorn” Startups of the SEC’s Investigation of Theranos
Elizabeth Holmes aimed to revolutionize the blood test industry and was once regarded as a wunderkind that would become the Steve Jobs of the biotech industry. The company she founded, Theranos, was seen as one of the “unicorn” startups in Silicon Valley, a term given to startups that are privately-held and valued at $1 billion or more.1 Unfortunately,…
Conflict Minerals: A Noble Cause, a Controversial Solution, and an Uncertain Future – Part III
In previous installments of this multi-part series, I discussed the historical context that was the impetus for Section 1502 of the Dodd-Frank Act as well as the mechanics of the final rule promulgated by the SEC.1 In this installment, I will lay out the current state of the law. Prior to Rule 13p-1 becoming effective…
The Potential Whiplash of Bandimere
In the last week of 2016, the U.S. Securities and Exchange Commission (SEC) received some news that spoiled its New Year’s celebrations. On December 27, 2016, the 10th Circuit Court of Appeals held that the SEC’s procedure for appointing its administrative law judges (ALJs) is unconstitutional.1 The 10th Circuit’s holding in Bandimere v. SEC not…
Conflict Minerals: A Noble Cause, a Controversial Solution, and an Uncertain Future (Part 2 of 2)
In the previous installment of this multi-part series, I briefly laid out the historical context that was the impetus for Section 1502 of the Dodd-Frank Act. In this installment, I will describe the mechanics of the final rule promulgated by the SEC. The final rule is Rule 13p-1 of the Exchange Act, which was adopted…
Regulation Crowdfunding: The Results Are In and the Future Looks Bright
Crowdfunding has become a common way for entrepreneurs to secure financing. In 2015, total global crowdfunding raised an estimated $34 billion in financing, compared to $2.7 billion in 2012. 1 With such a large impact on the economy, it was only a matter of time before industry regulation was enacted. On May 16, 2016, Regulation Crowdfunding…
Exxon Mobil and the SEC Oil and Gas Asset Reporting Standards
On September 20, 2016, the Wall Street Journal reported that the U.S. Securities and Exchange Commission (SEC) is investigating Exxon Mobil Corporation’s asset valuation.1 The probe focuses on Exxon’s asset valuations in light of climate change regulations.2 As part of the probe, the SEC is investigating Exxon’s tradition of not writing down its reserves during…
Conflict Minerals: A Noble Cause, a Controversial Solution, and an Uncertain Future (Part 1 of 2)
Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is an oft-forgotten piece of legislation. It found itself a miniscule minnow codified in the oceanic Dodd-Frank Act, which contained some of the most disruptive, paradigm-shifting rules enacted in recent memory. 1502 regulates the use of “conflict minerals,” or the so-called 3TGs: tin,…
Understanding the SEC’s Recent Crackdown on Private Equity
In the last few years, the private equity market has continued to balloon. In 2015, there was $2.4 trillion in private equity assets under management and the market as a whole saw an aggregate value of total buyout deals hit $411 billion.1 In comparison, there was $716 billion of total assets under management in the…