Massachusetts, Montana Sue SEC Over JOBS Act

The North American Securities Administrators Association is also uncomfortable with the SEC's current stand on the offerings. 

"The concerns raised by Massachusetts and Montana in their challenge to the SEC final rules implementing amendments to Regulation A are similar to those highlighted in NASAA comment letters to the SEC during the rulemaking process. In our letters we encouraged the SEC to work with the states to craft final rules that would maintain state authority to review and qualify Regulation A offerings consistent with federal law and for the protection of investors," said NASAA President and Washington Securities Director Bill Beatty, in a statement. 

"The SEC, however, chose to adopt rules that expand the types of Regulation A offerings that will be exempt from state review and registration contrary to the clear provisions of the applicable federal law and with little regard for the potential adverse impact on investors," Beatty explained. "While it is unclear how long it will take the courts to sort out these legal issues, NASAA remains committed to working with the SEC and the states to make the most out of Regulation A and new Regulation A+ for the benefit of investors and business alike."

In March, the SEC adopted final rules to facilitate smaller companies' access to capital by updating Regulation A, an existing exemption from registration for smaller issuers of securities. Since that time, the rules have been referred to as Regulation A+.

"These new rules provide an effective, workable path to raising capital that also provides strong investor protections," said SEC Chairwoman Mary Jo White, in a statement at the time. "It is important for the Commission to continue to look for ways that our rules can facilitate capital-raising by smaller companies."

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