The cancellation of the U.S. segment of Facebook’s private offering is having an effect. In an April 6 letter to House Committee on Oversight and Government Reform Chairman Darrell Issa (see March 22 Issa letter), SEC Chairman Mary Schapiro outlined significant reforms to private offering regulation that the staff is considering.

She discussed increasing the number of shareholders that can trigger public reporting under the Exchange Act (currently 500). She also mentioned permitting “crowd-funding,” or the unregulated sales of securities in very small offerings to any investor, subject to a maximum dollar amount (e.g., $100/investor). The SEC recently settled a case with crowd-funders who jumped the gun in raising capital to buy Pabst Beer. What would a crowd-funding rule look like?

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