SEC/CORPORATE -

DC Circuit Court Rejects States’ Challenge of Blue Sky Preemption Under Regulation A+ -

On June 14, the Federal Court of Appeals for the District of Columbia (the DC Circuit) rejected challenges from the State of Montana and the Commonwealth of Massachusetts to Regulation A+’s preemption of state securities “blue sky” registration and qualification requirements in Tier-2 offerings under Regulation A+. As previously reported in the June 5, 2015 edition of Corporate & Financial Weekly Digest, the Commonwealth of Massachusetts and the State of Montana, had filed lawsuits with the DC Circuit (which lawsuits were combined by the DC Circuit), which sought to enjoin the effectiveness of Regulation A+ on the basis that Regulation A+ exceeded the SEC’s congressional mandate by pre-empting state “blue sky” review of Tier 2 offerings under Regulation A+. This preemption is fundamental to the utility of Regulation A+.