Tom Sporkin Quoted in Bloomberg BNA Article, "New SEC Rules May Undercut Equity Crowdfunding Potential"
May 18, 2016
Tom Sporkin was quoted in Alexis Kramer's Bloomberg BNA article, "New SEC Rules May Undercut Equity Crowdfunding Potential," on May 18, 2016.
Companies thinking that crowdfunding by selling stock online is a good proposition may want to reconsider their optimism.
Securities and Exchange Commission rules allowing companies to raise funds by selling stock over the Internet that are set to take effect May 16 are limited and restrictive. The rules would enable individuals to invest a small amount of money in a business venture through a funding method called equity crowdfunding. But securities regulatory attorneys told Bloomberg BNA they aren’t yet convinced on how popular the method will become.
Thomas A. Sporkin, a partner at BuckleySandler LLP in Washington, said that equity crowdfunding under Title III is a great way for people to invest in their local community and see how their investment grows. But those community members will want to know that the business venture they are investing in is vibrant and profitable, he said. As such, companies may face scrutiny from a vast number of individuals who have a vested interest in the venture.
Originally published in Bloomberg BNA; Reprinted with permission.