Subject: SEC Regulatory Initiatives Under the JOBS Act: Title III Crowdfunding
From: Paul Spinrad

January 2, 2013

In my comment letter incorrectly dated July 26, 2010 (it should have read "July 26, 2012" - sorry!) I rough-drafted a suggested investor education and qualification exam for crowdfunding that includes 16 multiple-choice questions, each addressing a different possible red flag (or "Risk Factor")  for registration-exempt online investing.  Here is another, 17th question that I neglected to include:

Impersonation

Online identities can be stolen or hacked by criminals, who then use them to impersonate friends, family, and other people you know. If you receive or see an online investment solicitation that lists people you know as offerers, investors, recommenders, or otherwise involved, understand that it may be a scam that has nothing to do with them. Telephone them or discuss in person before investing, so you can hear their voice and verify that they are not being impersonated.  Don't rely solely on online communication, since it may already be compromised.  Be especially suspicious of online comments or conversations that somehow "ring false" -- are attributed to people you know, but don't seem like the way they normally communicate.

Choose the statement below that makes the most sense.

• Wow, here's an investment that my entire first-degree network highly recommends.  And in this discussion, many of them call it a "great opportunity." I'm in!
• I haven't heard from Brad in a while, but he just contacted me to invest in his can't-fail new business. Hmm, this doesn't seem relevant to his interests, and the wording here doesn't even really sound like him-- but hey-- good for him, and I'm glad to know about this!  Sure, I'll invest!
• This solicitation lists my friend Carol as an investor, but she never said anything about it when we had lunch last week, and it's something she would have mentioned. I'll call her up to check that it's true, and if it isn't, I'll forward the solicitation to the SEC's Crowdfunding Fraud email address and call their 24-Hour Crowdfunding Fraud Hotline to alert them.

Respecfully submitted,

Paul Spinrad