Dodd's financial regulation bill is a disaster of a clunker
There's alot I disagree with in Chris Dodd's regulation re-write. He has pretty much gotten it wrong on every point. But maybe the worst parts are the parts requiring venture capital firms to report to the SEC for systemic risk reasons (absolute nonsense!) and the regulation strangulation for angel investors:
Let's just regulate anything that actually causes economic growth and new jobs! Sounds like a plan! Seriously, do they even pretend to think these things through?
A bigger problem is that a section of the reform bill from Senator Chris Dodd (D.-Conn.) has three provisions that, taken altogether, could dampen angel investing far more than the Great Recession did. Currently, fledgling companies can raise money from accredited investors—high-net-worth individuals—without regulatory approval. The Dodd bill would require money-raising startups to register with the SEC, which would get 120 days to review the filing. The wealth and income baselines for angels would also double. The bill proposes revoking the rule that allows angels to follow federal regulations, rather than various state rules, in funding companies.
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