On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the “JOBS Act”) into law. The JOBS Act encompasses several significant changes to the federal securities laws, providing a proverbial facelift for the private capital raising provisions in the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002 (“SOX”). While President Obama’s signature ushers in a new era of fundraising opportunities for private companies, the JOBS Act leaves the details of crowdfunding and private offerings in the hands of the Securities and Exchange Commission (the “SEC”). As a result, the bi-partisan legislation initially developed in President Obama’s Startup Initiative, will now be turned over to the SEC who has not been particularly excited about drafting quick and easy regulations to implement these ground breaking initiatives. Although the legislation will provide new and innovative fundraising strategies for many small businesses, the SEC’s rulemaking process will likely delay the implementation of the JOBS Act for several months, if not longer.
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