The SEC Halted Longfin Cryptocurrency Stock Trading. This Reg A+ Offering Had Wild Price Swings Amid Insider Selling Allegations.
Investors Should Beware of Reg A+ Offerings. In 2012, Congress passed the Jumpstart our Business Startups or JOBS Act, which was designed to ease capital raising requirements for emerging growth companies which have $1 billion or less in annual revenue.
It was a big deal at the time – a bipartisan effort in Washington to show that the federal government could help small businesses after it bailed out Wall Street banks during the credit crisis. The JOBS Act streamlined registration requirements, making it easier to launch IPOs by bypassing certain accounting and disclosure requirements.
In other words, the JOBS Act was supposed to be a win for the little guy and help him raise capital to build small businesses efficiently and effectively. In 2015, The Securities Exchange Commission introduced rules to the JOBS Act and put into place what is known as Regulation A+.
The Reg A+ offering exemption was supposed to be another gain for small businesses. It allowed smaller companies to raise up to $50 million without having to incur many of the costs and burdens associated with a traditional Wall Street IPO. Read more from seekingalpha.com…
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