New SEC Rules on Private Offerings
by Michael J. Hagan
The Jumpstart Our Business Startups Act (JOBS Act) introduced the concept of raising capital through crowdfunding and directed the SEC to issue rules on the subject. On October 23, 2013, the SEC released the proposed rules on crowdfunding, providing an exemption from the registration requirements for certain crowdfunding transactions. The period for comments on the proposed rules ended on February 3, 2014 and, so far, the SEC has not yet announced whether it will adopt those rules as proposed or amend them.
This note provides a brief overview of the changes to Rule 506 and other relevant changes to rules in connection with Rule 506 offerings, and some of the anticipated changes to market practices that may accompany the final crowdfunding rules. 
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 This note does not constitute formal legal advice, and the reader may not rely on the discussion in this note as the legal basis for any offerings or solicitations, or other actions. You should consult with legal counsel before undertaking any of the actions referred to in this note.