November 10, 2013
As both an Investor an Entrepreneur, I would like to add the following insights and concerns to the general discussion regarding the finalization and acceptance of the U.S. SEC's Proposed Rules for Crowdfunding.
The topic I would like to comment on regards implementation of simple additional safeguards against fraud on Investors.
In considering the safeguards against frauds on Investors, I would propose that we incorporate in the Issuer vetting process, some type of very substantive measure to guarantee that the purported Principal(s) associated with any prospective Issuer be required to prove his or her respective identity conclusively. My concern originates secondary to the almost incessant and continual problem of identity theft in the United States (and around the globe). I would proffer that it would not be unduly burdensome upon the Principals of Issuers to submit either an electronic copy of their finger prints or a hard wet ink original copy of same along with a recent Passport Photo to the U.S. SEC for filing as most Sheriff's Departments in most Counties around America can for a small fee produce such indisputable evidence of a person's identity. Alternatively, a notarized authorization for the release of such evidence of identity could simply be procured from the Principals of Issuers where said Principals had previously provided finger prints to any State or Federal Agency. Perhaps there might be a better or simpler safeguard for discouraging "Bad Actors" from stealing the identity of good people and subsequently taking advantage of the "Crowdfunding" exemption under the JOBS Act. Perhaps so as to not offend the sensibilities of most people, something along the lines of two photo I.D.'s and a simple certification of identity be signed off on by an appropriate authority at the local level where the Principal normally claims residency (e.g. a local Sheriff, District Attorney, Judge or Chief of Police) would be in order. While certainly we have the natural carve outs for fraud on point here, my general concern is that it may be helpful in the bigger picture if we employ some type of safe guard that would make it more difficult for "Bad Actors" to perpetrate their frauds. This would not only benefit Investors, but it could help protect the identities of the true Principals that are associated with an Issuer. While we may never be able to stop all frauds
I thank you for investing the time to read and consider my comments here and I look forward to a bright future for America and her Small Businesses because of this important body of law (the JOBS Act) finally being brought to center stage and acted upon. It is my sincere hope that America will, as the result of the JOBS Act, find herself on a true path to prosperity in the very near future.
Kindest and best regards always,
LMB IV