|Richard Truesdell, Davis Polk
The Jump-start Our Business Startups (Jobs) Act will make life easier
for issuers but may expose banks to litigation risks, lawyers have
warned. It also indicates how the trajectory has changed in regards to
The Jobs Act, signed by US President Barack Obama last month, fosters
capital raising for companies both wanting to go public or stay
private. It is widely understood to be the most important financial
legislation since Dodd-Frank.
One aspect of the Jobs Act allows investment banks to publish market
research around the time of an IPO for companies with less than $1
billion in annual revenue – so-called emerging growth companies (EGCs).
This was previously forbidden, but it is not clear that a lifting of the
restriction will make much difference.
Research relating to EGCs could boost market confidence prior to an
offering, but publication of these materials could also expose...