Changes to “Accredited Investor” Definition – Capital Harder to Come By

Sales of equity to the public are subject to both state and federal securities laws.  If the securities are not registered, they must be issued under an exemption afforded under applicable law.  One of the exemptions afforded under the Securities Act of 1933 is issuances to individuals who are deemed “accredited investors” as defined by rules issued under such Act.  In general, “accredited investors” (as applied to natural persons) are individuals who have a net worth in excess of $1 million. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which became law on July 21, 2010, changed the manner in which the net worth for individuals is calculated when determining “accredited investor” status.  Prior to the Dodd-Frank Act, an individual’s primary residence was included when calculating net worth.  Not anymore; Section 413(a) of the Dodd-Frank Act adjusted the net worth standards for natural persons by specifically “excluding the value of the primary residence of such natural person.” In the proposed implementing regulations, the SEC seeks to further clarify the “net worth” calculation by deducting from net … Continue reading

Bias Against the Unemployed In Want Ads Soon To Be Illegal in NJ

On June 1, 2011 a new law (N.J.S.A. 34:8B-1 et seq.) regulating employment advertisements goes into effect in New Jersey.  Under the statute, employers (and their agents) publishing job advertisements (in print or online) for vacancies in NJ are prohibited from “knowingly or purposefully” utilizing ads that contain one or more of the following: A provision that a qualification for the job is current employment; A provision that the prospective employer will not consider or review job applications from unemployed applicants; or A provision that the prospective employer will only consider applications from employed applicants. Violators will be subject to a civil penalty up to $1,000 for the first offense, up to $5,000 for the second, and up to $10,000 for each subsequent offense.  The act does not create a private right of action for an aggrieved job applicant against a potential employer.  Rather, infractions are to be enforced by the Labor and Workforce Development Commissioner.  In no way does the act impact or regulate an employers’ actual hiring decision; it only addresses advertisements. Staffing companies seeking to fill jobs … Continue reading