Levin Statement on SEC’s Proposed General Solicitation Rule
Wednesday, August 29, 2012
WASHINGTON – Sen. Carl Levin, D-Mich., chairman of the Senate Permanent Subcommittee on Investigations, released the following statement today on the Securities and Exchange Commission’s proposed rule implementing the JOBS Act’s provisions on “general solicitation” stock offerings:
"Today, the SEC began undermining significant investor protections and putting ordinary Americans’ investments at risk. Just a few years after the financial crisis, it is disappointing that the SEC is proposing a rule that ignores years of experience and the law.
"These investor protections in existing law have been in place for decades, and prior revisions by the SEC led to increased fraud and were ultimately reversed by the SEC itself. Congress unwisely passed a law earlier this year that weakens those protections. The SEC voted today to compound the error by proposing a rule that puts our seniors and other vulnerable populations at increased risk.
"For instance, the SEC rule should require those who advertise private deals to take specific steps to ensure that investors have the wherewithal and expertise to make these risky investments. And it should require that the content of the advertising meets some minimum standards, such as those that mutual funds are subject to today. The proposed rule does neither.
"Thankfully, the SEC decided to follow its normal procedures and open the rule up for comment before its implementation. I hope the SEC will significantly improve the rule before it is put into effect."
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