

‘Crowdfunding’ Rules Are Unlikely to Meet Deadline - 001sky
http://www.nytimes.com/2012/12/27/business/smallbusiness/why-the-sec-is-likely-to-miss-its-deadline-to-write-crowdfunding-rules.html

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josephmosby
A large part of the push for crowdfunding has come from entrepreneurs and
their advocates who believe that a larger pool of funds will be beneficial to
the entire country. However, investors expect that the regulators are watching
out for them when they invest, by making sure that they are not being
maliciously misled by stock salesmen.

The SEC is struggling to write rules that keep that investment expectation
intact while still fulfilling the requirements of the JOBS Act. It is nowhere
near an easy task. If this had been pitched with the nasty truth - that
opening the crowdfunding door meant that a lot of investors would lose their
entire investment when the company went bankrupt - then we might have had some
faster turnaround. But instead, Congress requested that the SEC write rules
that would offer investors the same level of assurance for startups that it
requires for large publicly-traded firms. That doesn't get done in a
Congressional pie-in-the-sky deadline.

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joeco
This article details everything but the actual "why" behind the upcoming
missed deadline.

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rayiner
Federal agencies missing statutory deadlines doesn't really require a "why."
Congress sets statutory deadlines whilly-nilly with little regard for how long
the regulations take to implement. Moreover, enforcement agencies like the SEC
are woefully underfunded and overworked. The whole agency has 3,750 employees
responsible for regulating a highly-complex, multi-trillion dollar industry.
For comparison, Groupon has ~11,500 employees.

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camus
not only the SEC is underfunded , but its employes know there is a revolving
door waiting for them when they quit.

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rayiner
I don't think the revolving door is what makes them delay. I think it's an
overly cynical position not warranted by reality.

Having worked briefly at a federal agency, my impression was that people are
very dedicated to their jobs. They really believe in the mission of the
agency. But at the same time, many come from the industry and believe that the
industry itself is very important to the country. A typical securities lawyer
at the SEC doesn't think of banks as evil entities that must be put down. They
think of them as vital to the economy, and think of their role as regulators
as ensuring that everyone plays by the rules so the industry can thrive. They
consider a healthy banking industry as being in the public interest.

That is not to say that this doesn't bias them towards the banking industry.
But it's not a simple, cynical, "avoid prosecution so I can get a plum job
later." Cause and effect are too disconnected to really make that an issue. It
doesn't really effect your job prospects whether this or that enforcement
action happens.

