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Jumpstart Our Business Startups (JOBS) Act

This Act, passed in 2012, is intended to facilitate "emerging growth companies" (EGCs), defined as firms with $1 billion or less in annual revenues, to raise capital and conduct initial public offerings (IPOs). The key provision of the Act authorizes crowdfunding, which uses the Internet and related social media to offer and sell a company's stock to investors. The Act limits companies to raising money by these methods to (1) $1 million a year or (2) $2 million, if the company provides investors with audited financial statements. Opponents of the JOBS Act assert that it guts much-needed investor protections by legalizing what are essentially "boiler room" operations (i.e., operations that sell questionable investments by telephone, often using dishonest sales tactics, and at times committing outright fraud). See also Initial public offering.

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