Media Coverage
Source: Compliance Week
Media Coverage
03.05.13
Bob Robbins, head of Pillsbury’s corporate and securities practice, was quoted in an article discussing the successes and failures of the Jumpstart Our Business Startups Act, better known as the JOBS Act.
Discussing why companies have shied away from the confidential process and loosened internal controls allowed by the JOBS Act, Robbins explained, “People fear that the reduced disclosures will have a taint of inadequate disclosure.”
Robbins also commented on the SEC’s failure to implement several key benefits. The SEC missed its New Year's Eve deadline to finalize crowdfunding. Robbins suggested that even if implemented, it is unlikely to be significant. “Crowdfunding sounds like the most attractive thing to those who think it is the way people should raise money in the Internet age,” Robbins said. “But then you get to the actual statute and you have burdens of disclosure, ongoing reporting to the SEC, and accounting costs. With the limited amount you can raise, I just don't see how you can ever really make an economic go of it while actually complying with the rules.”
While the JOBS Act does focus on fostering IPOs, it could also benefit some companies that wish to remain private longer by increasing the number of shareholders they can have before needing to register with the SEC. “It is a big change that will help a lot of companies, particularly high tech companies that are private, but have a large number of employees who have stock options, restricted stock, or some other type of equity based compensation,” Robbins said.