Crowdfunding, The SEC Needs Positive Feedback

By Sara Hanks , CrowdFundBeat  Sr.contributing Guest Editor  CEO/Founder, CrowdCheck, Inc.

Here’s hoping that everyone in the crowdfunding community is planning to respond to the SEC’s proposals on Rule 147 and 504. Even if they think the SEC got it right. And that they will comment on all aspects of the proposals, even the bits that the SEC got right.

Here’s why. Let’s say the SEC proposes a rule that says companies must disclose whether pets are permitted at the company’s offices. Let’s imagine nearly everyone thinks “Well, that’s reasonable. I want to know how pup-friendly a company is.” They don’t comment because they assume the SEC will adopt the rules as proposed. But in the proposing release the SEC has asked whether this disclosure is appropriate, or whether some alternative form of disclosure, such as whether the CEO likes dogs, would be preferable. The Sneaky Dogs advocacy group doesn’t want anyone to know which offices might welcome dogs. Sneaky Dogs supporters write several comments letters advocating the alternative form of disclosure and no-one else comments. Now it looks to the SEC that the only people who care support the alternative disclosure, and that’s the way the rule is adopted. Despite the fact that nearly everyone loved the original proposal.

So if you like the way the SEC proposed the rules, TELL them. CrowdCheck will be drafting a comment letter, which we will likely post links to, and we are happy for people to copy chunks of it (or all of it for that matter) providing they pay attention to gerundives and do not insert “grocer’s apostrophes”. If you are feeling too lazy to even do that, just drop an message to the SEC saying “I support the proposal as drafted.”

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Sara Hanks, co-founder and CEO of CrowdCheck, is an attorney with over 30 years of experience in the corporate and securities field. CrowdCheckprovides due diligence and compliance services for online alternative securities offerings. Its services help entrepreneurs and project sponsors through the disclosure and due diligence process, give investors the information they need to make an informed investment decision and avoid fraud and help intermediaries avoid liability. Sara’sprior position was General Counsel of the bipartisan Congressional Oversight Panel, the overseer of the Troubled Asset Relief Program (TARP). Prior to that, Sara spent many years as a partner of Clifford Chance, one of the world’s largest law firms. While at Clifford Chance, she advised on capital markets transactions and corporate matters for companies throughout the world.Sara began her career with the London law firm Norton Rose. She later joined the Securities and Exchange Commission and as Chief of the Office of International Corporate Finance led the team drafting regulations that put into place a new generation of rules governing the capital-raising process. Sara received her law degree from Oxford University and is a member of the New York and DC bars and a Solicitor of the Supreme Court of England and Wales. She serves on the SEC’s Advisory Council on Small and Emerging Companies. She holds a Series 65 securities license as a registered investment advisor. Sara is an aunt, Army wife, skier, cyclist, gardener and animal lover.


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