SEC is urged to scrap Reg D rule

Oct 14, 2012 @ 12:01 am

By Mark Schoeff Jr.

Investor advocates and state regulators have called for the Securities and Exchange Commission to scrap a proposed rule that would authorize advertising for private placements.

The SEC issued the proposal in August as part of the regulations that would implement the JOBS Act. Supporters of the bill said that it would ease financial regulations on startup companies and help spur economic growth.

Critics assert that the SEC proposed rule on private-fund advertising was too vague and would hurt investors by allowing them to be lured in by slick sales pitches for opaque and volatile investments.

“Lifting the advertising ban on these highly risky, illiquid offerings without requiring appropriate safeguards will create chaos in the market and expose investors to an even greater risk of fraud and abuse,” Heath Abshure, Arkansas' securities commissioner and president of the North American Securities Administrators Association Inc., said during a conference call with the media.

The SEC is rushing to meet a congressional deadline and has left holes in the rule, said Barbara Roper, director of investor protection at the Consumer Federation of America.

In addition, the SEC has failed to do even a “cursory” economic analysis of the rule's potential impact on consumers, according to Ms. Roper, who said she doesn't rule out the CFA's filing a lawsuit.

The SEC declined to comment.

mschoeff@investmentnews.com Twitter: @markschoeff

0
Comments

What do you think?

View comments

Most watched

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Latest news & opinion

Tony Robbins loses role with RIA amid charges of sexual misconduct

String of allegations costs the self-help guru his gig as chief of investor psychology at Creative Planning.

SEC sets June 5 date for vote on Regulation Best Interest

Commission adds new item to agenda: Interpretation of broker guidance that qualifies as advice

House passes SECURE retirement bill with massive bipartisan support

The measure allows small employers to band together to offer plans and raises the RMD age. Another provision eases use of annuities in 401(k)s, which critics say goes too far

10 IBDs with the most annuity revenue

Here are the independent broker-dealers that brought in the most annuity revenue last year.

DOL sets date to propose new fiduciary rule

The regulation, expected in December, likely will be contoured to the SEC's new advice standards.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print