Fintech Company Hit with Securities Suit Completed Reg. A+ Offering in December

One of the changes Congress introduced in the Jumpstart our Business Startups (JOBS) Act of 2012 was the creation of a new securities offering exemption for smaller companies. In March 2015, the SEC introduced rules implementing this provision, known as Regulation A+. The track record for Reg. A+ offerings has been mixed, as discussed further below. Recent events involving Longfin Financial, a blockchain fintech company that just completed a Reg. A+ offering in December 2017 highlights many of the questions and concerns about Reg. A+ offerings. Longfin’s share price plunged over 80% after the company announced on Monday that its offering and a subsequent acquisition are the subject of an SEC investigation. Now the company has been hit with a securities class action lawsuit. As discussed below, these recent developments have a number of implications.   Background In the JOBS Act, Congress sought to implement a number of measures intended to make it easier for smaller…

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