Regulation A+ Earns A D

For more than eight decades, the Securities Act of 1933 has protected investors by requiring full disclosure in initial public offerings. As President Roosevelt explained at the time of its enactment, the statute was intended to restore confidence in public markets by ensuring that important information regarding new issues was not "concealed from the buying public."

In 2012, the Jumpstart Our Business Startups (JOBS) Act created a new type of offering that largely bypassed these investor protections. Commonly known as a mini- IPO or Regulation A+ offering, the provision allowed small companies to raise $50 million or less with limited regula­tions. Advocates claimed that by bypassing "burdensome" regulations the act would facilitate capital formation, create jobs, and reinvigorate capital markets.