Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Startup investors seek gay-couple equality from SEC

09/09/2013 | 01:53pm US/Eastern

A group of startup investors and venture capitalists are asking U.S. Securities and Exchange Commission Chair Mary Jo White to ensure investment rights equality for gay couples.

In a September 4 letter, more than 50 people with a campaign known as StartupEquality.org urged the SEC to afford gay couples the same rights as straight couples to invest in private placements and other startups.

At issue is an SEC rule that defines who is eligible to participate in private stock offerings.

That rule says only "accredited investors" who meet certain income or net worth thresholds are eligible. Under the rule, a married couple can combine their incomes to meet the accredited investor definition.

In June, the U.S. Supreme Court ruled in a landmark decision that struck down a federal law that denied federal benefits to legally married gay and lesbian couples.

StartupEquality.org is concerned that gay couples in states that do not allow gay marriage could effectively be locked out of the start-up market.

As the rule is currently written, the investors said they fear couples joined in civil unions or domestic partnerships, rather than technically married, could be prevented from qualifying as "accredited investors."

"If you are not an 'accredited investor,' you are effectively shut out of early stage investing," the investors wrote.

StartupEquality.org's letter was submitted to the SEC in response to a July proposal to require hedge funds and other firms offering private stock deals to provide regulators with more information on the nature of their ads and steps they took to verify they were only advertising to qualified accredited investors.

Part of that proposal also asks the public to comment on whether changes are needed in the SEC's definition of accredited investor.

StartupQuality.org's letter urges the SEC to tweak its accredited investor rule to define the term "spouse" more broadly so that it will cover a domestic partner, designated beneficiary, husband or wife - regardless of gender or sexual orientation.

"This problem is urgent," the investors wrote.

"For the sake of justice, and to protect the integrity of capital formation for America's innovation economy, we respectfully urge you to adopt the clarifying rule."

SEC spokesman John Nester declined to comment on the letter.

He noted that the 2010 Dodd-Frank Wall Street reform law requires the SEC to revisit and consider revisions to the accredited investor definition every four years.

The last change the SEC made to the definition was in 2011, after the agency moved to exclude the home value in the calculation of net worth.

By law, the SEC is not able to make changes to the definition of accredited investor until 2014.

It will likely consider making some changes next year, especially after the Government Accountability Office in July issued a report urging the SEC to modernize the accredited investor definition.

(Reporting by Sarah N. Lynch; editing by Andrew Hay)

By Sarah N. Lynch

React to this article
Latest news
Date Title
04:27p ISLET SCIENCES : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
04:27p ENERGIZER : Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Other Events (form 8-K)
04:27p Lux Fun Hawaii Unveils the Avery Claire as a 54-Foot Yacht Cruising the Hawaiian Islands with a Three-Person Exploration Submarine
04:26p RPM IN : DE/ : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
04:25p INTEGRA LIFESCIENCES : Entry into a Material Definitive Agreement, Submission of Matters to a Vote of Security Holders, Financial Statements and Exhibits (form 8-K)
04:25p RED ROBIN GOURMET BURGERS : Change in Directors or Principal Officers, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Submission of Matters to a Vote of Security Holders, Financial Statements and Exhibits (form 8-K)
04:25p CENTURY MINING : May 29, 2015 Castle Mountain Proposes Name Change to NewCastle Gold Ltd.
04:25p CEL SCI : NEW STORY CEL-SCI Announces Closing of Public Offering for Gross Proceeds of $16 Million
04:25p LIGHT : 2015-05-29T17:00:47 Minutes of Extraordinary Shareholders Meeting
04:25p dynaCERT Inc. Announces Extension of Private Placement and Provides Update on Continuous Disclosure
Latest news
Advertisement
Hot News 
HERON THERAPEUTICS : DE/ : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
IMMUNODIAGNOSTIC SYSTEMS HLDGS : Expects Further Revenue Fall In Current Year
LONDON MIDDAY BRIEFING : TeleCity's Deal Agreed But Synergy's Stalls
MINCO : 2015 Q1 MD&A Report
U.S. Stocks Trade Lower
Most Read News
05/28 Airbus debates new A320 output hike, suffers test glitch
02:05a SUZLON ENERGY : Back from the brink
05/28DJNIKE : FIFA Indictment Doesn't Allege Criminal Conduct By Company
05/28DJFederal Investigators Blame Shell for Alaska Drill-Ship Accident
02:37p INTEL CLOSE TO DEAL TO BUY ALTERA FOR $16 BILLION : sources
Most recommended articles
04:16p Data weighs on Wall St.; indexes post May gains
04:15p GBP/USD Carves Bearish Pattern Ahead of BoE Interest Rate Decision
04:08p TSX ends down as economic worries hurt banks
03:57pDJOil Prices Extend Gains After Drilling Data
03:56pDJAmerican Express President Ed Gilligan Dies -- 4th Update