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SEC Appoints Small Business Capital Committee Members

The U.S. Securities and Exchange Commission has appointed members to its newly-formed Small Business Capital Formation Advisory Committee as it works to support small business access to capital.

Reports in Bloomberg Law’s Big Law Business on Friday (April 26) said Investment bank Cowen and accounting firm Grant Thornton are both seeing members of their senior executive teams join the SEC’s initiative. Lawyers, company founders and other industry stakeholders are also participating, the publication said, including MasterCraft Boad Holdinfs, Upwork, and Fenwick & West LLP executives.

The SEC’s new advocate for small business capital formation, Martha Legg Miller, and 15 other members are also a part of the team, reports said.

“As the Commission continues to focus on facilitating capital-raising opportunities for small- and medium-sized businesses and expanding investment opportunities for retail investors, input and expertise from such an experienced and diverse set of companies, entrepreneurs and investors will be invaluable,” said the SEC’s commissioners in a joint statement.

The committee, which is the result of the 2016 SEC Small Business Advocate Act, will meet for the first time in early May, according to reports. It succeeds the Advisory Committee on Small and Emerging Companies, which ceded operation in 2017.

The SEC has initiated several efforts to address friction and wrongdoing in the small business lending market in recent years as alternative and marketplace lending, regulations and other factors disrupt the current landscape of SMB capital and finance.

Earlier this month reports said the SEC issued a fine against Prosper for overstating investor returns, while in March the founder and CEO of Direct Lending Investments resigned amid an SEC probe into the company’s small business lending platform QuarterSpot.

Last year, SEC Chairman Jay Clayton announced plans to explore allowing individuals the opportunity to invest in non-public companies.

The SEC has also targeted the growing threat of cyberattacks against small businesses, with the Business Email Compromise a particular focus for the government agency. Last October the SEC released a report that that urged public companies to focus on cybersecurity and accounting controls to combat the threat of the scam.

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