The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 21 Aug 2026 13:20:22 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.10 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Facilitating General Solicitation at the Expense of Investors – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Facilitating General Solicitation at the Expense of Investors https://corpgov.law.harvard.edu/2013/07/11/facilitating-general-solicitation-at-the-expense-of-investors/?utm_source=rss&utm_medium=rss&utm_campaign=facilitating-general-solicitation-at-the-expense-of-investors https://corpgov.law.harvard.edu/2013/07/11/facilitating-general-solicitation-at-the-expense-of-investors/#comments Thu, 11 Jul 2013 13:07:57 +0000 http://blogs.law.harvard.edu/corpgov/?p=49227?d=20130711090757EDT Editor’s Note: Luis A. Aguilar is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Aguilar’s statement at a recent open meeting of the SEC; the full text, including footnotes, is available here. The views expressed in the post are those of Commissioner Aguilar and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

Today [July 10, 2013], among other things, the Commission considers amendments to Rule 506 of Regulation D, to remove the prohibition against general solicitation and advertising, if sales are made only to accredited investors. I do not support this action because both the process followed in proposing the amendments and the actual amendments being considered today come at the expense of investors and place investors at greater risk. I am particularly disappointed because this flies in the face of the Commission’s mission and did not have to be the case.

The Commission has both the Authority and the Obligation to Protect Investors in Implementing JOBS Act Section 201

Last year, Congress passed the Jumpstart Our Business Startups Act (“JOBS Act”). Section 201(a) of the JOBS Act requires the Commission to revise Rule 506 to remove the prohibition against general solicitation and general advertising, provided that all the purchasers in the offering are accredited investors.

It is without doubt the responsibility of the Commission to implement Section 201 of the JOBS Act. It is equally without doubt that this responsibility cannot be separated from the Commission’s duty to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Congress established the Commission as the independent agency with the expertise and authority to administer the federal securities laws. By statute, the Commission has the power to make, amend, and rescind the rules and regulations needed from time to time to carry out the provisions of such laws.

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