SEC’s Piwowar Warns About ‘SAFE’ Crowdfunding Instrument

May 15, 2017

SEC’s Piwowar Warns About ‘SAFE’ Crowdfunding Instrument

SEC Office of Investor Education and Advocacy issues ‘SAFE’ alert the same day

May 9, 2017 | by Melanie Waddell | ThinkAdvisor

The Securities and Exchange Commission is monitoring a troubling trend arising out of its Regulation Crowdfunding – the use of a new startup-financing instrument, the so-called “SAFE,” in offerings that are intended for a broad, mostly retail base of investors, SEC Commissioner Michael Piwowar said Tuesday.

Speaking at the North American Securities Administrators Association’s and SEC annual Section 19(d) Conference, (held just before NASAA’s annual public policy conference), Piwowar stated that SAFE, which stands for a “simple agreement for future equity,” is an agreement “between an investor and a company in which the company generally promises to give the investor a future equity stake in the company if certain triggering events occur.”

While these SAFE securities have been used in some Reg CF offerings, “they are not securities with which many retail investors are well acquainted,” Piwowar said.

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Derek Hayes
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April 14, 2016

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