House Subcommittee Demands Explanation of SEC’s Delayed JOBS Act Rulemaking
Title II of the JOBS Act provides that, within 90 days of the passage of the JOBS Act (i.e. July 5, 2012), the SEC will amend Section 4(2) of the Securities Act of 1933 and Regulation D promulgated there under, to eliminate the prohibition on general solicitation and general advertising in a Rule 506 offering, so long as all purchasers in such offering are accredited investors. However, on June 27, 2012 Mary Schapiro, Securities and Exchange Commission chairman told the House Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs that the SEC would not meet the 90 day deadline. At that time, Ms. Schapiro told the U.S. House committee that the SEC expected the rules to be implemented by late summer 2012.
The SEC scheduled a hearing on the general solicitation rules for August 22, 2012, but then rescheduled the hearing for August 29, 2012. The House is not happy with the delay. In a letter, Rep. Patrick McHenry (R-NC) requested Mary Schapiro, to appear before a House subcommittee hearing on September 13, 2012, expressing dissatisfaction over the SEC’s progress in implementing regulations under the new federal JOBS Act. The hearing was set as a result of the SEC delays.
Moreover, Rep. McHenry’s letter demands that the SEC produce to his subcommittee by 5:00 pm EST on August 30, 2012 all communications and documents between or among the SEC commissioners and staff regarding potential SEC action to implement the general solicitation rules. McHenry’s letter states ”The hearing will examine the Commission’s implementation of the JOBS Act, including your failure to implement Section 201 of the JOBS Act by the Act’s statutory deadline and by the deadline you committed in previous testimony.”
The SEC has stated on more than one occasion that it is immersed in drafting the new crowdfunding rules, including the rules related to funding portals and other Crowdfund investment intermediaries. However, the Crowdfund rules are not yet behind schedule, unlike the Title II rules related to the elimination of the prohibition on general solicitation and general advertising for private placements. The delay in the relatively simple Title II rules does not create confidence for the much more complex crowdfunding rules which are scheduled for early 2013. Moreover, the SEC is still far behind on completing much of the required new rules under the 2010 Dodd-Frank Wall Street reform law as well as market structure reforms following the May 6, 2010 crash.
Attorney Laura Anthony,
Founding Partner, Legal & Compliance, LLC
Securities, Reverse Mergers, Corporate Transactions
Securities attorney Laura Anthony provides ongoing corporate counsel to small and mid-size public Companies as well as private Companies intending to go public on the over the counter market including the OTCBB and OTCQB. For almost two decades Ms. Anthony has dedicated her securities law practice towards being “the big firm alternative.” Clients receive fast and efficient cutting-edge legal service without the inherent delays and unnecessary expense of “partner-heavy” securities law firms.
Ms. Anthony’s focus includes but is not limited to crowdfunding, registration statements, PIPE transactions, private placements, reverse mergers, and compliance with the reporting requirements of the Securities Exchange Act of 1934 including Forms 10-Q, 10-K and 8-K and the proxy requirements of Section 14. Moreover, Ms. Anthony represents both target and acquiring companies in reverse mergers and forward mergers, including preparation of deal documents such as Merger Agreements, Stock Purchase Agreements, Asset Purchase Agreements and Reorganization Agreements. Ms. Anthony prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SRO’s such as FINRA and DTC for corporate changes such as name changes, reverse and forward splits and change of domicile.
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