Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business Finance

Senators urge SEC to reconsider proposal that could hurt startups

The SEC has proposed new rules to layer on top of the JOBS Act, which two Senators say could truly hurt startups, so they’re urging the SEC to reconsider.

SEC

sec rules, jobs act

SEC implementation of new laws could hurt startups

Senators Pat Toomey (R-PA) and John Thune (R-SD) teamed up to write a letter to the Securities and Exchange Commission (SEC) Chairman, Mary Jo White, stating that rules created and proposed by the SEC for startups, despite being based on the JOBS Act, could counteract the benefits of the bill.

The letter reads, “The additional measures that the SEC has proposed go beyond Congress’s clear mandate in Section 201, and would impose unnecessary and burdensome requirements that will have adverse effects on small businesses and investors, and undo the progress made under Section 201.”

Further, the Senators note, “As sponsors of this provision, we respectfully urge the Commission to note Congressional intent and not adopt the additional proposals in order to ensure the benefits of the JOBS Act are realized for small businesses and investors.”

The JOBS Act

The JOBS Act was initially designed to create jobs and grow businesses by reducing regulations surrounding the process of investment, and was signed into law in the spring of 2012. Senators Toomey and Thune assert that the SEC is propsing rules that actually make the investment process more difficult.

Advertisement. Scroll to continue reading.

This summer, the JOBS Act did away with a rule dating back 80 years that banned the general solicitation and advertising of Regulation D (“Reg D”) offerings, putting businesses in a situation where they previously could not say publicly that they were fundraising, rather could only solicit investors they knew personally or had been personally introduced to. Now, accredited investors must have a net worth over $1 million, or an individual income exceeding $200,000 for a minimum of two years, or a joint net worth with a spouse of over $300,000 for a minimum of two years.

As the push and pull at the SEC continues, Chairman White is in a tight spot, as the JOBS Act cannot truly go into effect until all rules are finalized.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Opinion Editorials

(SOCIAL MEDIA) Musk is far from meager when it comes to business. After buying an almost 10% stake in Twitter, he declined board status,...

Business Finance

(FINANCE) Many choose to freelance in order to escape the daily grind of working for an hourly wage. Why, then, should a freelancer charge...

Business Finance

(FINANCE) Freelancers who are not always promised a regular paycheck could benefit from staying on top of their finances. Here's our tips!

Business Finance

(FINANCE) Especially when just starting out, setting your freelance rate can be a complicated process. Here's 5 tips to help!

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.