Roper said, however, that a legal challenge to the SEC's rules ending the ban on general solicitation is unlikely.
Industry advocates were equally incredulous at the SEC's proposed investor protections.
John Borer, the head of investment banking at Benchmark Co., who also sits on the SEC Advisory Committee on Small and Emerging Companies, said he agrees with Commissioners Paredes and Gallagher that the new investor protections will thwart the intent of the JOBS Act.
"Why are they putting this in there? Just to hire more statisticians to look at information they never even required before?" he said. "Prefiling on a Form D before general solicitation, that was never part of the game before. It costs money, takes time and what's the benefit? Do they have any idea how much this stuff costs?"
Nevertheless, Borer said he was glad the commissioners finally agreed to end the ban on general solicitation. "It makes sense and it made sense a year ago," he said.
Written by Dan Lonkevich And Bill Meagher.