On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (the “Act”), a wide-ranging legislative response to the private sector which repeatedly voiced concerns regarding the existence of substantial burdens on the ability of issuers to engage in capital formation activities. As expected, the Act will have a significant impact upon federal securities laws and is intended, among other things, to provide increased access to debt and equity capital for issuers generally and “Emerging Growth Companies” specifically.

This Alert primarily addresses the Act’s sanction of the use by all issuer’s of general solicitation and general advertising in private placements of securities conducted pursuant to Rule 506 of Regulation D (“Rule 506”) of the Securities Act of 1933, as amended (the “Securities Act”). In addition, this Alert also describes similar changes to Rule 144A(d)(1) of the Securities Act (“Rule 144A”). For additional information regarding the Act, please refer to The JOBS Act: Increase in and Division of Section 12(g) Registration Requirement, The JOBS Act: Crowdfunding, The JOBS Act: Emerging Growth Companies and the IPO On-Ramp and The JOBS Act Quick Reference Chart.