‘Crowdfunding’ Rules Are Unlikely to Meet Deadline
nytimes.com
nytimes.com
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.
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.