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Please stop repeating the same bullshit that seemingly every VC pundit is repeating about the Dodd bill. The "2.3m" figure is a total fabrication! The bill doe

by blasdel 17y ago

Please stop repeating the same bullshit that seemingly every VC pundit is repeating about the Dodd bill. The "2.3m" figure is a total fabrication! The bill does not set new requirements at all. It just explicitly authorizes the SEC to adjust the income & net-worth requirements for inflation. The SEC was already empowered to alter the requirements independently of legislation (since they were not set by legislation), but they've never done so. The figures quoted are pulled out of their ass — they just took the old figures and adjusted for the last 30 years of inflation since they were set. Nothing in the bill says the SEC has to adjust it all at once or at all.

gojomo 17y ago
Why would new "explicit authorization" be needed if using that power wasn't foreseen? These discriminatory thresholds shouldn't be raised one dollar -- they should be reduced, abolished, or replaced with something more respectful of individual circumstance (like a percentage-of-portfolio in private equity or waivers based on experience rather than pure wealth).
anamax 17y ago
> The bill does not set new requirements at all. It just explicitly authorizes the SEC to adjust the income & net-worth requirements for inflation. Oh really? Let's look at what the relevant section, 412, actually says. 19 SEC. 412. ADJUSTING THE ACCREDITED INVESTOR STAND20 ARD FOR INFLATION. 21 The Commission shall, by rule— 22 (1) increase the financial threshold for an ac23 credited investor, as set forth in the rules of the 24 Commission under the Securities Act of 1933, by 25 calculating an amount that is greater than the [page break omitted] 1 amount in effect on the date of enactment of this 2 Act of $200,000 income for a natural person (or 3 $300,000 for a couple) and $1,000,000 in assets, as 4 the Commission determines is appropriate and in the 5 public interest, in light of price inflation since those 6 figures were determined; and 7 (2) adjust that threshold not less frequently 8 than once every 5 years, to reflect the percentage in 9 crease in the cost of living. http://banking.senate.gov/public/_files/AYO09D44_xml.pdf http://banking.senate.gov/public/_files/AYO09D44_xml.pdf If you're going to argue that "shall" doesn't mean that the SEC is being told to compute a number and apply it, please provide supporting evidence.
- blasdel 17y ago
  I had read it before as authorization, but you're right that it does command the SEC to raise the numbers at least every 5 years starting now, but it leaves the increases completely up to the SEC. The "2.3m" figure is bullshit, the maximum that the SEC could possibly justify.
  - anamax 17y ago
    > it leaves the increases completely up to the SEC. Not at all - it specifies the factor to be used. They seem to have some leeway in the initial bump, but since they've been given their marching orders, it's absurd to think that they'll deviate much. Note that there will be no legal basis for arguing for such a deviation. > The "2.3m" figure is bullshit, the maximum that the SEC could possibly justify. Suppose that they go with $2M instead of $2.3M. Will you regard that "yeah, I was correct, you folks were crying wolf"? I'm serious - what's your "I was wrong" number?

by blasdel 17y ago

gojomo 17y ago

Why would new "explicit authorization" be needed if using that power wasn't foreseen? These discriminatory thresholds shouldn't be raised one dollar -- they should be reduced, abolished, or replaced with something more respectful of individual circumstance (like a percentage-of-portfolio in private equity or waivers based on experience rather than pure wealth).

anamax 17y ago

> The bill does not set new requirements at all. It just explicitly authorizes the SEC to adjust the income & net-worth requirements for inflation. Oh really? Let's look at what the relevant section, 412, actually says. 19 SEC. 412. ADJUSTING THE ACCREDITED INVESTOR STAND20 ARD FOR INFLATION. 21 The Commission shall, by rule— 22 (1) increase the financial threshold for an ac23 credited investor, as set forth in the rules of the 24 Commission under the Securities Act of 1933, by 25 calculating an amount that is greater than the [page break omitted] 1 amount in effect on the date of enactment of this 2 Act of $200,000 income for a natural person (or 3 $300,000 for a couple) and $1,000,000 in assets, as 4 the Commission determines is appropriate and in the 5 public interest, in light of price inflation since those 6 figures were determined; and 7 (2) adjust that threshold not less frequently 8 than once every 5 years, to reflect the percentage in 9 crease in the cost of living. http://banking.senate.gov/public/_files/AYO09D44_xml.pdf http://banking.senate.gov/public/_files/AYO09D44_xml.pdf If you're going to argue that "shall" doesn't mean that the SEC is being told to compute a number and apply it, please provide supporting evidence.

blasdel 17y ago
I had read it before as authorization, but you're right that it does command the SEC to raise the numbers at least every 5 years starting now, but it leaves the increases completely up to the SEC. The "2.3m" figure is bullshit, the maximum that the SEC could possibly justify.
- anamax 17y ago
  > it leaves the increases completely up to the SEC. Not at all - it specifies the factor to be used. They seem to have some leeway in the initial bump, but since they've been given their marching orders, it's absurd to think that they'll deviate much. Note that there will be no legal basis for arguing for such a deviation. > The "2.3m" figure is bullshit, the maximum that the SEC could possibly justify. Suppose that they go with $2M instead of $2.3M. Will you regard that "yeah, I was correct, you folks were crying wolf"? I'm serious - what's your "I was wrong" number?