Charles Marsala Discusses: Reg A+ and Reg D

Charles Marsala May 3, 2015 0
Charles Marsala Discusses: Reg A+ and Reg D

Reg A+ and Reg D are not the latest music to come from the Caribbean.  They are laws and guidelines which Congress enacted to allow small companies to raise money and protect investors seeking Alternatives to Publicly Traded Stocks and Bonds.


Title IV of the JOBS ACT of 2012 mandated the SEC to amend Regulation A requirements of the Securities Act of 1933, to incentivize more nonpublic companies to offer publicly to investors.


Reg A was created as an alternative to the Private Placement Option available under Reg D.  Reg D was created to remove unnecessary SEC restrictions for small business issuers and to conform state and federal exemptions to facilitate capital formation while protecting investors.


Among the new changes proposed by the SEC in 2015 is Reg A+, which will increase the amount that can be raised from $5 million to $50 Million in a twelve month period.


The changes will increase “Crowdfunding” and marketing of Private Placement Offerings.  This happens during a time of increased reporting of Securities Fraud.


Investors should review audited financial statements for compliance with US GAAP standards, inspect the company’s filings with their respective states for required disclosures by the issuers, and research the background of the Managing Partners.


Managing Partners can remove funds from Profitable Companies by payments to third party companies in which they own an interest, or transfer company assets at below market prices before defaulting on initial investors.  These actions are common enough to have terms: “Bustout Bankruptcy Fraud”; “Fraudulent Transfer to Avoid Creditors”; and “Squeeze-out Merger” to remove minority partners.


Private Placement Offerings offer diversification, but require homework and come with risk.


This article is for informational purposes only and is not a complete summary of information needed to recommend any investment. Consult the appropriate professional to determine how this information applies to your unique situation.

About the Author: Charles Marsala is a Financial Advisor with Benchmark Investment Group with Securities offered through LPL Financial, a member FINRA/SIPC. He can be contacted at





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