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Cronin’s Corner – JOBS Act

By Michael T. Cronin | Categories: Business & Tax LawPrint PDF April 2013

Welcome to the first edition of Cronin’s Corner.  Consider this section of the newsletter analogous to the blue plate special at your local diner.  After practicing corporate and securities law for 30 years, I can honestly say “you never know what’s coming through the door”.  I will share personal insights, current issues on my desk and practical application.  Let’s start with a guide to the JOBS Act.

In an effort to ease regulatory burdens on smaller companies and facilitate capital formation, President Obama enacted the Jumpstart Our Business Startups (JOBS) Act on April 5, 2012.

The JOBS Act includes a number of measures to facilitate capital formation, including:

  • An initial public offering (IPO) on-ramp for a new category of issuer, “emerging growth companies.”
  • Removal of the prohibition against general solicitation and general advertising in certain private placements.
  • A new exemption under the Securities Act of 1933, as amended (Securities Act), for crowdfunding offerings.
  • An amendment to the Securities Act (informally referred to as Regulation A+) permitting companies to conduct offerings to raise up to $50 million through a “mini-registration” process similar to Regulation A.
  • Higher triggering thresholds for Securities and Exchange Commission (SEC) reporting obligations under the Securities Exchange Act of 1934, as amended (Exchange Act).

Eliminating the restriction on advertising and solicitation for 506 offerings, which are essentially offerings solely to accredited investors, has the greatest potential application in our market area.  It will require a tightening up and a more thorough analysis of the accreditation standards in the subscription agreement.

Don’t overlook the significance of increasing the threshold to become an SEC reporting company to 1,000 shareholders of record.  I believe this will have significant positive application for community banks for which I expect to see increased consolidation activity over the next few years in our market area.

For more information, please click on the link below, which will take you to a detailed outline and related background materials.  Feel free to email me at

Download pdf; A Guide to the JOBS Act

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