Subject: File No. S7-09-13
From: Justin A Ritter, Esquire
Affiliation: Associate Attorney, Spinella, Owings Shaia, P.C.

November 18, 2013

I imagine you are aware that issuers cannot utilize the crowdfunding exemption if the company is an investment company. 15 U.S.C.A. 77d-1(f)(3) prohibits investments companies, as defined in section 15 U.S.C.A. 80a-3 from utilizing the crowdfunding exemption. 77d-1(f)(3) also prohibits those businesses explicitly excluded from being defined as investment companies, as found in 80a-3(b) or (c).

80a-3(b) is where my issue originates. One type of business exempted/excluded from being an investment company is (b)(1) namely any issuer primarily engaged, directly or through a wholly-owned subsidiary or subsidiaries, in a business or businesses other than that of investing, reinvesting, owning, holding or trading in securities.

To me this means that essentially, nearly all types of businesses would be excluded from utilizing crowdfunding.

In the proposed rules, the SEC noted that hedge funds should not be a permissible issuer via crowdfunding because it was an exempted form of business under 80a-3(c).

The SEC must not have intended this, unless I am missing something. I went over this with another attorney at my office and he agreed that the way 77d-1(f)(3) was written doesnt seem to make practical sense.

I talked with Sabastian Gomez with the SEC about this issue. While he did not give an opinion, he did think 80a-3(b)(1)may apply only in the limited circumstance where the issuer otherwise could be defined as an investment company within the defition/provision of 80a-3(a)(1)(C), due to the language "Notwithstanding paragraph (1)(C) of subsection (a) of this section".

Is he correct?

Thank you, and otherwise I am very excited about the potential of your final rule.

Justin A. Ritter

(Attached File #1: s70913-58.pdf)