When I guestblogged here last year, I wrote about crowdfunded securities. The upshot was that crowdsourcing platforms like Kickstarter can't support investment, because that's illegal; they can only offer tiered "perks" for donations at various levels. But I (and others) believe that crowdfunded securities should be legal without expensive SEC registration under certain conditions, starting with if individual investment is capped at a relatively low figure, like $100.
In that post, I also floated the idea of crowdfunding a campaign to pursue such a "crowdfunding exemption." I invited people to contact me if they wanted to keep up with such efforts, and got nice feedback from a bunch of folks. Encouraged, I dug in some more and found out that getting something like this going would actually be easier than I thought. First of all, the SEC has the authority to rewrite its own regulations, without any congressional review (which sounds like a recipe for corruption, and indeed...). Second, the SEC, via its website, lets anyone submit Petitions for Rulemaking and solicits comments on these petitions. You send it, and they will post it-- and then also post all the comments they receive. This quiet backwater of the SEC's website struck me as good territory for some crowd action.
Now, a half year later, all the pieces are in place. A campaign on IndieGoGo quickly raised the money to fund the Sustainable Economies Law Center (SELC) to draft the petition, which was completed last week. I'm thrilled at how the petition came out-- it's very well researched and argued, and joy to read. The SELC sent the petition to the SEC last Thursday, and as of this morning, the SEC has posted it to their website, as File No. 4-605. You can see the list of funders in the first footnote, at the bottom of page 1. Huzzah!
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