CF countdown: why does the SEC hate singing kittens?

Actually, the SEC has no views specifically on singing kittens that I know of (although I am aware of at least one SEC staffer smuggling a cat into the building). The issue arises, though, in the context of “notices” of offerings under the new crowdfunding rules. As you probably know, the provisions of the JOBS Act limit the extent to which a company issuing securities can advertise the terms of the offering anywhere other than on the website of the broker-dealer or funding portal hosting the offering. The SEC’s rules clarify what is permitted in these notices. The issuer can post a brief notice including information about the company and what it does and what it is offering. The notice must specify the platform on which the offering is hosted.

 The SEC likens these notices to “tombstones,” the traditional notices placed with respect to offerings of securities in print media like the Wall Street Journal. But just because traditional securities offerings have always looked this way doesn’t mean that notices are required to be black and white text in a newspaper. The rules restrict content, but not medium, and the SEC’s Adopting Release specifically refers to the use of social media to make such notices.

 So I read the rules as permitting issuers to use (and pay third parties for) all of the following notices:

  •  Animated singing kittens on You Tube with the following message: “We are making a crowdfunding offering of purr-ferred shares. Go to for more information.”
  • Models walking around Times Square wearing no more than body paint bearing the tombstone information.
  • A wizard in a video game breaking the “fourth wall” to speak the tombstone information and perhaps point with his wand to an actual tombstone bearing a link to
  • The barrista in an indie coffee shop drawing the information in teeny letters in the foam of your cappucino.

 Of course, if you can afford the WSJ, you can always print an actual old-school tombstone notice too.

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