Presently, the Securities and Exchange Commission (SEC) prevents companies from issuing shares for capital unless they register with the SEC. However, a House panel recently approved legislation sanctioning “crowdfunding.” The legislation would allow new businesses to raise up to $5 million, with individual contributions capped at $10,000 (or 10% of an investor’s annual income), without registering with the SEC. The Entrepreneurial Access to Capital Act, HR 2930 is sponsored by Rep. Patrick McHenry (R-NC), who explained that it will create jobs by connecting entrepreneurs to the everyday investor.

A recent decision by the United States Court of Appeals for the Second Circuit found that the Financial Industry Regulatory Authority (“FINRA”) has no legal authority to bring an action in court to collect fines imposed on its members. This decision exposes a noticeable gap in FINRA’s enforcement powers; it can levy fines, but it cannot seek enforcement concerning collection of those fines in court.

On October 12, 2011, the SEC, together with the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), issued proposed regulations implementing Section 619 of the Dodd-Frank Act, popularly referred to as the “Volcker Rule.” Among other things, the Volcker Rule generally (i) prohibits banking entities from engaging in short-term proprietary trading activities; and (ii) limits banking entities from investing in or having certain relationships with a hedge fund or private equity fund.

On September 29, 2011, the SEC issued a Risk Alert warning of concerns regarding trading through sub-accounts, and offered
suggestions to help the securities industry address those risks.