Mark Roderick, Flaster Greenberg’s resident crowdfunding and fintech attorney, was quoted extensively in a Law360 article discussing speculation over whether a decision by the U.S. Securities and Exchange Commission to soften the rules around securities-based crowdfunding would actually invite a larger crowd to participate.
The SEC recently concluded that results for equity crowdfunding have been "relatively modest" since rules went live in May 2016. However, Mark states that "The term 'relatively modest' is probably an overstatement. It has been less successful than that. I would characterize it as certainly disappointing."
Roderick said crowdfunding could grow if individual investment limits were removed on accredited investors, which are generally individuals who have at least $200,000 annual income or net worth of at least $1 million excluding home value. "The per-investor limits [on accredited investors] are ridiculous," he said.
He is also concerned that crowdfunding is developing a reputation for attracting "low quality companies," and is skeptical that many changes are likely for crowdfunding. He noted that some revisions being considered would require changes in law, not just regulations.
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