JOBS Act May Cause D&O Coverage Concerns, Report Says

Law360, New York (May 29, 2012, 8:36 PM EDT) -- While the JOBS Act helps smaller companies raise capital, it also opens the door to potential securities class actions and investigations that may not be covered by their directors and officers policies, a report released Tuesday said.

The JOBS Act, which President Barack Obama signed into law in April, relaxes restrictions on private fundraising and expressly allows companies to "crowd-fund" up to $1 million in capital over a 12-month period from a large number of small investors online.

It also gives emerging growth companies — those...
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