October 21, 2014
-The SEC has an opportunity here to clarify what it has failed to do over the last 40 years in terms of finders.To allow FINRA to shift its definition to the SEC'S DEFINITION OF DOING BUSINESS is not wise or efficient.The staff knows the history of this and that they have narrowed the issue to whether a transaction fee is paid and that the industry believes it is safe to pay fixed fees to employees or finder/consultants.What is the benefit of leaving this unsaid at this point and leaving the Paul Anka letter in a penumbra of uncertainty.The staff can approve this rule and simultaneously deliver a clear transaction fee test. Many small businesses rely on this type of financing and there is little evidence of abuse.The staff has promised to deal with the finder issue ever since it received the ABA report many years ago and has failed to do so as has the Small Business Forum.Yet many have suggested that finders are being paid regularly and the staff is well aware of it.There should be a Small Business Forum coming up and the staff should take this natter to them for discussion.Finally to suggest that small businesses can request a no-action letter is unrealistic in terms of costs and expertise.This issue can be dealt with clearly and should be.