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SEC Chair Schapiro to Step Down, Likely Delaying JOBS Act Crowdfunding

SEC Chair Schapiro to Step Down, Likely Delaying JOBS Act Crowdfunding

A long reported rumor became official today, and it's one of particular interest to all those keeping a watchful eye on Washington to see when the SEC might finally wrap up its rulemaking process for JOBS Act equity crowdfunding.  

Mary Schapiro, chair of the Securities and Exchange Commission charged with drafting the new regulatory framework for crowdfunding, has just made public the news that she plans to step down next month.

“It has been an incredibly rewarding experience to work with so many dedicated SEC staff who strive every day to protect investors and ensure our markets operate with integrity,” said Chairman Schapiro in a statement. “Over the past four years we have brought a record number of enforcement actions, engaged in one of the busiest rulemaking periods, and gained greater authority from Congress to better fulfill our mission.”

Schapiro oversaw the beginning of implementation of the major financial overhaul known as Dodd-Frank, and of course, the JOBS Act, which still has a long way to go. 

Schapiro plans to leave her post effective December 14th, which means we can look forward to a lengthy confirmation process for her replacement. As a result, JOBS Act rulemaking is likely to be put on hold or at least slowed down in the interim. 

So consider this news today a sort of official confirmation of what we've already known for months -- equity crowdfunding will not be ready to go by the end of the 9-month rulemaking deadline included in the JOBS Act. 

How much longer will we have to wait? Several months, or perhaps a full year, or perhaps longer, according to some of the most educated guesswork going on right now. For a detailed hypothetical timeline and the steps that still need to be taken to realize crowdfunding in the U.S., check out this recent post from David Drake. He's betting on 2014.

 - Eric Mack is Managing Editor for  He has covered business, technology and politics for more than a decade for major outlets including CNET, CBS, AOL, NPR, Wired, and the New York Times.  You can contact him at Find him on Twitter and Google+. Also be sure to follow on Twitter.

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  • Steve Reaser Steve Reaser Nov 27, 2012 05:52 pm GMT

    Why do you say there will be a lengthy confirmation process? Walter was named as the replacement, not nominated -- she served as interim director before, so she will not need to be confirmed by congress but rather can take over immediately when Shapiro steps down on Dec 14. (At least according to news reports I've read.)

  • Eric Mack Eric Mack Nov 28, 2012 03:51 pm GMT

    CLARIFYING AN EARLIER COMMENT - Each member of the SEC is nominated by the President and confirmed by the Senate. That means that while Walter will be chair until 2013, there will still be a confirmation process for the vacant seat Schapiro leaves, and until that time we'll have an SEC with 2 Republicans and 2 Democrats creating the potential for gridlock. It's completely possible that work on the JOBS act will continue apace through this whole process and that the confirmations will go off without a hitch. However, there's no real motivation for anyone within the SEC to push forward quickly. And since the SEC is in the spotlight more than usual with the Dodd-Frank implementation and the state of the global economy, and the Senate has a tendency to move slowly (particularly without a supermajority of either party), there's good reason to expect a potentially drawn out confirmation.

  • Randy H. Greer Randy H. Greer Nov 28, 2012 11:38 pm GMT

    The SEC FINFRA clarification cartel will more than likely burst any crowdfunding bubble before it ever inflates.

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