Feature suggestion for HootSuite, TweetDeck, etc.: publish tweets concurrently to SEC general solicitation siteBy http://profile.typepad.com/1237764140s22740 // July 12, 2013 in General Solicitation, Reg D
I can't let go of this "tweeting for investors" meme (my God, I just used that word; I still don't know what it means, but, hopefully I've used it somewhat correctly here).
Two reasons the "tweeting for investors" meme has legs.
One, it is the phrase coined (or else used first most famously) by John Coffee, a prominent academic and commentator on arcane corporate and securities law stuff. He used the phrase derisively, if only by way of dismissing equity crowdfunding among non-accredtied investors (I think he actually supports repeal of the ban on general solicitation in Rule 506 deals). But no matter. Sometimes the best metaphors to embrace to identify a cause are epithets intended as putdowns. Just turn that frown right around into a smile. "Obamacare."
But more important than that is a second reason: "tweeting for investors" fairly describes what many entrepreneurs assume is now okay, should be okay, now that the ban on general solicitation has been lifted.
As long as all investors who purchase in the offering are accredited - verified accredited, no less - why should any means of communication be barred? "Tweeting for investors" as a metaphor for this new permissiveness is almost perfect, because it evokes a communication means that is intermittent, casual, conversational, ad hoc. Maybe even in-the-moment and authentic.
But a funny thing happened on the way to approving final rules to lift the ban on general solicitation: new rules, proposed rules, were published at the same time! Rules proposing that those engaging in general solicitation must publish "any written communication" to an SEC site no later than the day used for generally soliciting!
Here's the pertinent text of this proposed rule (which is, I should admit, proposed as a temporary rule, to sunset after two years):
"An issuer shall submit to the Commission any written communication that constitutes a general solicitation or general advertising in any offering conducted in reliance on § 230.506(c) no later than the date of first use. The communication shall be submitted using the intake page designated on the Commission’s website for the submission of such materials."
Cue Hootsuite: "today we're announcing a new feature for those who may be tweeting on behalf of of startups engaged in general solicitation or general advertising to finance their companies; now, whenever you tweet, you have the option to concurrently file that tweet with the SEC, a legal requirement that became effective, guess what, just about the same time that the rules lifting the ban on general solicitation were effective."
That HootSuite announcement was hypothetical, of course.
I'm also not sure about how the final rules and the proposed rules will mesh, timing wise. It's possible that the 60 day delay in effectiveness of the rules lifting the ban on general solicitation won't allow enough time for the proposed rules about written materials to be finalized.
But there's no question that the SEC wants more information about generally solicited Rule 506 deals, hereinafter 506(c) deals, including information about channels of advertising, nor that the Commission wants to share that information with the various state regulators.