2013 Jobs Act Review & Analysis of Emerging Growth Company IPOs

In April 2012, the U.S. Congress passed the Jumpstart Our Business Startups Act (the “JOBS Act”) with the goals of expanding access to capital markets and increasing flexibility in capital formation. In short, the JOBS Act eases restrictions imposed by federal securities laws. These laws—primarily the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002,5 as amended (the “Sarbanes-Oxley Act”), and the Dodd-Frank Wall Street Reform and Consumer Protection Act,6 as amended (the “Dodd-Frank Act”)—are intended to protect both investors and markets. This article is comprised of five Parts. Part II provides an overview of the JOBS Act, and Part III reviews JOBS Act-related rulemaking activity in 2013. While several JOBS Act provisions became effective upon enactment, other provisions have required rulemaking by the Securities and Exchange Commission (“SEC”). Part IV examines the extent to which the JOBS Act has impacted initial public offering (“IPO”) activity in 2013. In particular, Part IV explores the extent to which companies have utilized the emerging growth company provisions of the JOBS Act. In the past year, IPOs have made a resurgence. This article posits that the JOBS Act may have been too broad and that companies that have recently gone public do not exhibit the attributes of an issuer as contemplated by Title I of the JOBS Act. Finally, Part V provides a brief conclusion