Ridiculous: SEC Boss Refused To Move Forward On Required Crowdfunding Rules To Protect Her 'Legacy'
from the her-legacy-is-a-joke dept
Earlier this year, the JOBS Act passed Congress with widespread bipartisan support, and was signed into law by the President. There were a few different pieces involved, but one that got plenty of attention was the opening up of crowdfunding for equity (i.e., owning actual shares in a company). In the US, you can’t do a crowdfunding campaign that results in giving ownership in the company. Until the JOBS Act passed, that was considered a form of a public offering, which is a highly regulated area, in which you have to file all sorts of documents with the SEC, get an underwriter, go on a road show, all that fun stuff. But for smaller businesses looking to raise some money, this doesn’t make much sense. The JOBS Act opened up a small sliver of space in which smaller companies could raise a little bit of money in exchange for equity. The SEC actively opposed the whole thing from the beginning, but once the bill was law, it was also tasked with setting up the rules for how it would work to limit possible fraud.
Back in August, we noted that the SEC’s rules were due out any day, but had been pushed back at least a week as various state regulators argued that the whole thing was just going to be used for massive scamming. Since then the whole process has been fought over and changed numerous times. Newly released emails suggest that it wasn’t because the SEC was struggling with setting the best rules possible… but because SEC boss Mary Schapiro was worried about her legacy. She’s leaving the position in two weeks and apparently didn’t want to put in place strict rules for fear that it would tarnish her reputation as being “pro-investor.”
“I don’t want to be tagged with an anti-investor legacy,” Schapiro wrote in an e-mail to [Corporation Finance Director Meredith] Cross with the subject line “Please don’t forward.”
“In light of all that’s been accomplished, that wouldn’t be fair, but it is what will be said …”
Whether or not you think the rules are good or bad, we should have SEC commissioners who focus on doing what’s right… now how things are going to look on their resume when they go hunting for a job in the industry after leaving public service.