Five steps the SEC can take to make crowdfunding work
“To properly regulate crowdfunding without suffocating it at inception, the regulators at the SEC must strike the right balance between guarding against fraud and allowing the marketplace to work its will,” posted Sarah Henks today on Reuters “The Great Debate” op-ed site. Ms. Henks is the former General Counsel of the Congressional Oversight Panel for TARP, founder of CrowdCheck.biz, and a Leadership Team member of the Crowdfound Intermediary Regulatory Advocates (CFIRA).
In her op-ed article, Ms. Henks recommends five actions the SEC should take to help crowdfunding flourish:
- Make crowdfunding easily searchable.
- Define social-media boundaries. Provide detailed guidance as to how businesses seeking crowdfunding may use social media.
- Allow crowdfunding portals to be selective.
- Let the private sector work. Acknowledge the important role that the private sector will play in policing crowdfunding.
The opt-ed article can be reviewed at Reuters’ The Great Debate.
Sara Hanks is a corporate and securities attorney and Leadership Team Member of CFIRA. She recently stepped down as the General Counsel of the Congressional Oversight Panel for TARP and is launching CrowdCheck.biz, a tool for entrepreneurs and investors looking for transparent crowdfunding investments.
Crowdfund Intermediary Regulatory Advocates, or CFIRA, was established following the signing of the Jumpstart Our Business Startups (JOBS) Act. CFIRA is an organization formed by the crowdfunding industry’s leading platforms and experts. The group will work with the Securities & Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and other affected governmental and quasi-governmental entities to help establish industry standards and best practices. For more information, visit www.CFIRA.org.
