April 20, 2012
My comments are limited to Title III of the Act relating to investment-based crowdfunding. The legislation as passed by Congress contains the phrase "business plan". Some marketing people have interpreted that to mean that a "traditional business plan" will suffice with respect to meeting the disclosure obligations of the new law. I've already seen two articles posted online providing what I believe to be this misleading information. I've tried to explain to such persons that the use of the term "business plan" in the context of the legislation, is actually referring to a major section of a securities disclosure document, a section we may also refer to as "description of business" (to avoid this sort of confusion). I've also pointed out that the legislation clearly calls for a securities disclosure document (not a business plan), with specific disclosures required and the minimal disclosure standard, the anti-fraud rule actually set forth in the legislation itself. Hopefully, your forthcoming regulations with respect to the Act will clarify this situation and make clear that a securities disclosure document is what is called for, not a business plan.
Thanks for your consideration,
John Cones, Securities Attorney