Grassroots Securities Deregulation

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In July, I blogged
here
about the

"crowdfunding exemption" petition, File No. 4-605
,
which the SEC had just posted to their website. The petition seeks to
allow people to solicit investment of up to $100,000 in amounts capped
at $100 without having to register with either the SEC or their state's
department of corporations (a process which can cost $50,000 and up).
Many people, myself included, believe that this simple exemption, which
the SEC has the authority to allow, presents minimal risk to investors
and would have many positive effects on innovation, culture,
opportunity, the economy, etc.

The fun news is, the proposal seems to be gaining traction! It turns out
that others have been advocating similar exemptions, including Michael Shuman,
author of

Going Local
and

The Small-Mart Revolution
. And now,
the American Sustainable Business Council,
a lobbying and advocacy group with many right-on members, has decided to
support SEC rulemaking petition 4-605 as part of a new "Sustainable
Economic Development" campaign, which will also encourage the SBA (Small
Business Administration) to promote "TBL" accounting (Triple Bottom
Line: financial, labor, and environmental). But note that the ASBC's
new campaign will be on their back burner (and won't appear on their
website) until January or so, because they're currently focused on
other efforts, which require the current Congress during its remaining
time in session.

Meanwhile, Jenny Kassan of the Sustainable Economies
Law Center
(SELC), who authored 4-605, did a great
radio interview
about the petition on Oct 29 on "U Need 2 Know" with Frank Knapp
(tagline: Talk Radio for the Brain), on WOIC 1230 AM, Columbia, SC.
Knapp starts out by saying he's "fascinated" by our proposal. The
interview is about 12 minutes long-- check it
out!

Members of the public are invited to comment on the proposal by emailing rule-comments@sec.gov with
"File No. 4-605" in the Subject line
. All comments are posted to
the SEC's website here, and a
nice variety of people have sent in original and thoughtful comments,
including

Michael Sauvante,


Mark White,


James J. Angel,


Danae Ringelmann,


Eric Saint-Andre,


Andres La Saga,


Peter J. Chepucavage,
and
myself.

Also, CREDO Action member Mimi Plevin-Foust has posted

a petition on Change.org
that does a terrific job of summarizing the
issue and lets you submit a comment to the SEC by clicking a "Sign"
button. Mimi's original goal of 100 signers was quickly met, so she
raised it to 200, and then 500. Note that the letters generated by the
CREDO/Change.org petition are sent to the office of SEC Chair Mary
Schapiro, not
rule-comments@sec.gov, so they
will not appear on the SEC's website. (Even if they did, they would not
be listed individually; the SEC handles robo-letters by tallying them
anonymously as "Letter Type A", as you can see in the comments
submitted for this previous petition
: 2195 unnamed / undated
robo-signatures tallied at the top of the page, and about 25 original
letters listed by date and author.)

Someone from the White House Office of Science and Technology Policy
(OSTP), the same office that likes

Maker Faire, MAKE
, and

Mythbusters
, contacted me to recommend that I attend the SEC
Government-Business Forum on Small Business Capital Formation

(a.k.a. Small Business Forum) next Thursday, November 18th. He said that
OSTP is looking at crowdfunding as a possible way of promoting
entrepreneurship and high-growth startups. Great! This was very
encouraging, and others who also know Washington have made the same
suggestion. So I'm going, along with representatives from the SELC, who drafted
File No. 4-605, the ASBC, and many others. Almost every day
over the past week, I've learned about someone else from some other
interesting-sounding organization or company who will be joining our
crew at the all-day forum. It's open to the public, so come on down! You can register
to
attend in person or remotely.

A bunch of us are also gathering the night before the forum, Nov 17th,
at
CommonWealth
Gastropub
starting at around 7:30, to meet in person, hang out, and
scheme. All are welcome-- it should be interesting and fun!

As for the SEC Forum itself, the stated purpose of which is for the SEC to
listen to the needs of small business, the official

agenda
indicates that it's all presentations and discussion
by the SEC and their invited panelists until 2pm, at which
point we reassemble into breakout groups to develop recommendations
(we'll all be in Room 6000). The agenda does not make it clear
how the resulting recommendations make it back to the SEC, and also
indicates that that neither SEC Commissioners nor SEC staff are
expected to be present at these discussions. So I guess we'll be left
alone to play paper football and trash the place.

For more info on this campaign and to sign up for updates visit crowdfundinglaw.com.