Wells Fargo Announces Four-Point Plan to Expand Credit Coaching Programs and Offer $75 Million in Investments, Grants and Micro-Lending for Small Businesses in the U.S.

To help business owners learn how to obtain credit, as well as better understand the reasons for a decline and learn how to prepare to reapply, Wells Fargo has launched a new Credit Coaching program

  By Robert Hoskins

San Francisco, California – To gain more insight into the experiences of diverse business owners in the areas of lending and operating their businesses, Wells Fargo commissioned Gallup to conduct a national study of small business owners. Today, as Gallup releases the findings (on Gallup.com), Wells Fargo is announcing a four-point plan to address needs identified in the study. The plan will help more diverse small businesses become credit-ready and gain access to credit. The Gallup survey included findings of business owners in six segments – African American, Asian American, Hispanic, LGBT (Lesbian, Gay, Bisexual and Transgender), military veteran, and women.

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“Serving diverse communities has long been a focus area and priority for Wells Fargo, yet we know there’s more work to be done, and it starts with gaining a deeper understanding of the experiences of diverse small business owners working with financial institutions,” said Lisa Stevens, head of Small Business for Wells Fargo. “For this reason, we commissioned the Gallup study, which gave us new insight into the perceptions and experiences of diverse business owners working with banks, and how we can improve as a company and as an industry.”

Overall, the national study revealed there are more similarities than differences between small business owners in all diverse segments and those in the general population. It also shows specific areas in which the financial services industry can provide more support for diverse business owners.

Credit Coaching Program

In the Gallup survey, diverse-owned small businesses were more likely to respond that they have been declined for business credit – about one in five African American, Asian and Hispanic business owners said they faced a credit decline in the past (14 percent of general market respondents said they faced a decline). After being declined, a higher percentage of African American business owners (64 percent) said they did not apply for credit again than their peers in the general small business population (47 percent). African American (14 percent) and LGBT (15 percent) business owners also reported greater personal credit challenges than the general market (5 percent).

To help business owners learn how to obtain credit, as well as better understand the reasons for a decline and learn how to prepare to reapply, Wells Fargo has launched an enhanced Credit Coaching program. It offers expanded support to business owners who have been declined business credit. The phone-based program has been rolled out to small business owners who apply for Wells Fargo Business Direct credit products (primarily credit products under $100,000 sold through its retail banking stores). Business owners who use the program will be connected with a credit specialist who will review the business’ credit profile, explain why the business was declined credit, and share resources that can help the business strengthen its credit profile and improve the likelihood of being approved for business credit in the future.

In addition, while the majority of business owners surveyed across all segments said they did not feel a perception of discrimination from a financial institution impacted their chances of obtaining business credit, 22 percent of African American and 11 percent of LGBT business owners reported that perceived discrimination impacted their chances of obtaining credit for their business, compared to 5 percent of the general small business owner population. The Credit Coaching initiative will be one way Wells Fargo will further increase transparency of credit decisions and facilitate conversations that build trust with all customers.

“We take pride in the fact that diversity and inclusion has long been one of our core values in every aspect of our business, and at every level of our organization,” said Stevens. “We want to make sure all customers feel welcome, respected, understood, valued and appreciated. The actions we’re introducing today are the next steps for Wells Fargo to better serve and connect with diverse-segment business owners.”

Community Development Financial Institutions Investments, Grants

Another key finding in the Gallup study is that African American, Asian and Hispanic small business owners are more likely to be in the start-up and growing stages of their business, compared to the small business population in general, and as a result may not qualify for many conventional bank loan products. In addition, 49 percent of African American-, 47 percent of women- and 45 percent of LGBT-owned businesses in the survey reported annual business revenue of less than $50,000, compared to 36 percent of small business owners in general.

To help newer, smaller and start-up businesses access the appropriate business financing and support they need, Wells Fargo will extend $50 million in investments and $25 million in grants to organizations called Community Development Financial Institutions (CDFIs) that serve small businesses and entrepreneurs. The investments and grants will be directed to CDFIs that help small businesses get started and established by providing flexible capital and technical assistance. Wells Fargo will work with existing and new CDFI customers in diverse communities across the country to deploy this capital and measure its impact.

“We know that in order to address the range of financial needs within all of our communities, we need to support and work with the ecosystem of organizations that serve small businesses,” said Jon Campbell, executive vice president, government and community relations for Wells Fargo. “Through this increased investment and connections with community lending organizations, we are making meaningful strides toward increasing access to capital for small businesses, as well as helping more business owners get the coaching and educational resources they need to succeed financially long-term.”

Nationwide Referral Network

In the Gallup study, more African American, Asian and Hispanic business owners reported they were unable to obtain all the credit they needed in the past year than the general business owner population, yet the majority of small business owners in all diverse segments said they did not need credit in the last year. At the same time, nearly one in four African American, Hispanic and Asian business owners plans to apply for credit in the next 12 months, higher than the general small business owner population planning to pursue credit (15 percent). Businesses in the startup and growing phases in general expressed more intentions to apply for new credit.

To ensure business owners are aware of and accessing the full range of financing options available to them, Wells Fargo recently established referral relationships with more than 20 nonprofits and other lenders in cities across the country that are participating in the U.S. Small Business Administration’s (SBA) Community Advantage program. Participants in the SBA’s program specialize in providing hands-on guidance to small businesses and offering credit to qualifying businesses in underserved markets. Wells Fargo, the nation’s No. 1 SBA lender 7(a) in dollar volume for six consecutive years (U.S. SBA data, federal fiscal years 2009-2014), established these relationships with the intent of providing small business owners with an additional financing solution that may better meet their lending needs.

Chamber Training Institute

On the topic of business education, the Gallup study showed that African American, Asian and Hispanic business owners were more likely than business owners in the general population to be extremely or very interested in learning how to build a strong business credit application, choose a credit product, and develop a business plan. To meet this demand, Wells Fargo is supporting a Chamber Training Institute that trains leaders of diverse-segment chambers of commerce on key business and leadership topics for their members, such as how to access business credit and craft strong business plans. This cross-chamber initiative builds on Wells Fargo’s strong working relationships with chambers nationwide that specifically serve and represent African American, Hispanic, Asian American and LGBT business owner interests.

“There’s no single answer to the challenges reflected in the study, just as the challenges facing all diverse-owned businesses are broader than any one financial institution can address,” Stevens said. “As America’s leading small business lender, we have a responsibility to do more. We believe the steps we’re taking will make a difference, help us foster more lifelong relationships, and move us closer to our goal of helping every business we serve succeed financially. We want to contribute to a national conversation, involving the public and private sector, industry stakeholders and small business owners, about how to better support small businesses in every community.”

Additional Gallup study findings

Other key findings in Gallup’s industry study included:

• Only about half of small business owners say they have ever borrowed money for their business, including the general population of small business owners (50 percent), Asian (53 percent) and Hispanic (51 percent) segments, while the percentage of African American business owners who have used credit (42 percent) is somewhat lower.
• African American (21 percent) and Hispanic (18 percent) business owners were more likely than their counterparts in the general population (10 percent) to be in the startup phase.
• Nearly half of Asian-owned business owners (49 percent) said they were in the growing phase of their business, a higher percentage than the general population of small business owners (37 percent). Also, 38 percent of Asian-owned businesses reported annual revenue of $250,000 or more, compared to 22 percent of businesses overall.
• A higher proportion of veteran-owned businesses (24 percent) reported being in the winding down phase – preparing to retire, sell or transition their businesses – than small business owners in general (15 percent).
• Just 9 percent of women business owners reported plans to apply for new credit in the next 12 months, compared with 20 percent of men surveyed.

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Crowdfunding Site, OurCrowd.com, Shows the World that the Equity Crowdfunding Industry is Sailing into the Global Economy Full Steam Ahead

OurCrowd evolves from participating in early seed rounds to a leadership position by successfully pooling tens of millions of dollars from top tier venture capital firms

By Robert Hoskins

Jerusalem, Israel – OurCrowd leads equity crowdfunding deal that reels in $16M in Series E funding round for Borro.com, the UK-NY based, asset-backed online lender. OurCrowd was joined by Rocket Internet AG (RKET), Canaan Partners and Augmentum Capital in this funding round.

OurCrowd alone raised $6M of the capital invested, making this the single largest equity crowdfunding round ever completed and demonstrates how equity crowdfunding can complement and even lead traditional funding sources, such as venture capital.

“In under two years, OurCrowd went from participating in early seed rounds to now successfully  leading a $16M dollar major funding round together with top tier venture capital firms such as Canaan and the renowned internet company, Rocket,” said Jon Medved, OurCrowd’s CEO. “We are delighted to be investing in quality companies like Borro, which is redefining the Fintech industry.”

Launched in the UK in 2009 and in the US in 2012, Borro has defined a new category of online personal asset-based lending. Borro focuses on providing liquidity to individuals, entrepreneurs, and business owners who use luxury personal assets such as watches, jewelry, supercars, fine art, antiques and high-end handbags as collateral for short term loans.

“Seven years ago, I joined the first angel investor group at Lending Club (LC) and witnessed first-hand the exponential growth of online lending,” Medved added.  “Lending Club’s IPO in December of 2014 was a pivotal point in the online lending industry and has shown that there will be multiple winners with eventual multi-billion dollar market caps. ”

Paul Aitken, CEO and Founder of Borro, said: “We are delighted with our collaboration with OurCrowd. Their ability to lead this important funding round has proven that equity crowdfunding has indeed come of age. I was excited by the quality of the investors they have brought to the table and am looking forward to their adding additional value to Borro as we move forward.”

Borro was recently ranked #8 right behind Lending Club (NYSE: LC) #6 and OnDeck #7 (NYSE: ONDK) in KPMG’s 50 Best Fintech Innovators Report. OurCrowd ranked #22 on the list.  Borro is backed by a consortium of high caliber VC investors with significant expertise in online finance.

Investing alongside OurCrowd is Rocket Internet AG, a German internet company based in Berlin that builds online startups and owns share of various internet companies including Foodpanda/Hellofood, Home24, Jabong, Jumia and Lamoda.  Other Borro investors include Canaan Partners (investor in Lending Club) and Augmentum Capital (investor in the UK’s top lending marketplace, Zopa). Borro has recruited notable financial industry veterans to its board of directors who bring a significant amount of experience to the company, including Nigel Morris (co-founder Capital One) as Chairman and Paul Grattan (ex-CEO Egg, First Direct.)

Borro launched in 2009 in the UK, and has gone on to open offices in New York and Los Angeles.  It is the leading online platform for luxury asset-backed lending and has defined a new lending category in a climate where loans to individuals, SMEs and entrepreneurs were few and far between. Borro offers loans from $5,000 – $2,000,000 secured against luxury assets including fine art, antiques, jewelry, luxury watches, fine wine, prestige and classic cars and other high-value assets. Borro investors include: Canaan Partners (Lending Club), Eden Ventures, Augmentum Capital. Borro’s board of directors includes Nigel Morris (co-founder Capital One) as Chairman, and Paul Gratton (ex-CEO Egg, First Direct).

OurCrowd is the leading hybrid venture capital equity crowdfunding platform for accredited investors who wish to invest in Israeli and global early stage companies. Managed by a team of well-known investment professionals and led by serial entrepreneur Jon Medved, OurCrowd selects opportunities, invests its own capital and brings these startups to its accredited membership. Members choose those deals they invest in via OurCrowd-managed partnerships.

OurCrowd investors must meet stringent accreditation criteria and invest a minimum of $10,000 per deal. OurCrowd provides post investment support to its portfolio companies, assigning industry experts as mentors and taking board seats. OurCrowd has raised over $100 million in equity crowdfunding for its 57 portfolio companies which include leading companies, such as: BillGuard, Consumer Physics (SCiO), BioCatch, Abe’s Market and ReWalk, OurCrowd’s first portfolio company to complete a successful IPO on the NASDAQ.

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WeCareCard Crowdfunding Credit Card Delivers a Simple, Seamless and Secure Way to Share the Wealth in Las Vegas

The cause-related fundraising site will offer a prepaid debit card to fundraisers to support them in times of hardships and celebrations

By Robert Hoskins

Las Vegas, Nevada – WeCareCard introduces the first-ever prepaid debit card tied to a crowdfunding platform. The first-of-its-kind patent pending technology will fulfill a crowdfunding campaign’s financial component by loading funds onto a WeCareCard Prepaid MasterCard rather than the traditional fulfillment method of check, bank account deposit or PayPal.

WeCareCard crowdfunding site delivers a simple, seamless and secure way to share stories of hardships or celebrations, connect networks and gather funds for those in need

The idea of WeCareCard spurred from co-founders Jessica Weiss, a former nurse who consistently witnessed first-hand financial hardships caused by unexpected medical bills and Phillip Qualls, a Technology, Payments and Financial Services executive with more than 20 years of experience in the industry.

“I saw an opportunity to leverage my experience to revolutionize relational giving and gifting by leveraging crowdfunding, prepaid and patent pending technology. Announcing the card at the world’s premier destination for emerging payments and financial services organizations, made perfect sense.” said Qualls.

The Indiana-based cause-related crowdfunding site delivers a simple, seamless and secure way to share stories of hardships or celebrations, connect networks and gather funds for those in need. The WeCareCard Prepaid MasterCard serves as the money- management tool, welcomed at over 25 million MasterCard locations worldwide. The card will be delivered to fundraisers early in their WeCareCard crowdfunding campaign and funds will be loaded throughout the duration of the campaign, helping fundraisers manage the expenses related to their cause directly, quickly and easily.

“After our family suffered hardships associated with long-term illness, I began contemplating how I could help others through similar situations,” said Weiss. “I knew there had to be a simple, streamlined way to help more people locally, and nationally through an online platform and prepaid debit card.

WeCareCard has retained Atlanta-based FirstView Financial as their card processor and program manager. FirstView excels at innovation in the high-growth prepaid card and mobile payments arenas. Metropolitan Commercial Bank (New York, NY) will be the issuer of the WeCareCard Prepaid MasterCard.

We are very excited to be working with WeCareCard on this new crowdfunding and prepaid solution,” said Jerry Uffner, CEO of FirstView Financial. “This new platform will help serve a very large audience. There are so many people in need of immediate financial relief and we are just happy to be a part of the initiative that will help remove that burden as quickly as possible.”

Individuals and organizations interested in receiving funding through WeCareCard’s platform can click here to apply for consideration.

WeCareCard is the first-ever online fundraising platform tied to a prepaid debit card that empowers people from around the nation to raise funds for a variety of life-changing causes. The cause-related fundraising solution delivers a simple, seamless and secure way to share stories, connect networks and gather immediate funds for those in need through the WeCareCard Prepaid MasterCard. This prepaid card serves as a money management tool and is welcomed at over 25 million MasterCard locations worldwide.

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Finance-Technology Company Receives $2 Million Crowdlending Loan from Denver-Based P2Binvestor

New Peer-to-Business lender pools investment from more than 350 accredited investors to provide receivables-based, no equity loss loans for businesses

By Robert Hoskins

Denver, CO – Representing one of the largest single crowdlending transactions ever, P2Binvestor (P2Bi) announced that the crowdlender provided a $2 million line of credit to a Boulder-based Finance-Technology (Fin-Tech) client.  This credit line adds to P2Bi’s rapid growth and puts the young company on a run rate to achieve a lending portfolio of $25 million by the end of its fiscal year.

New Peer-to-Business lender pools investment from more than 350 accredited investors to provide receivables-based, no equity loss loans for businesses

P2Bi is a crowdlending platform that provides working investment capital via three types of asset-based loans to small and midsize businesses:

1. a receivables-purchase product;
2. an asset-backed line of credit, and;
3. a credit line secured by future contractual revenue.

“Our easy online application process, quick funding decisions, competitive rates, and crowdfunding model are what set us apart,” said Krista Morgan, P2Bi’s Co-founder and COO. “But at the end of the day, clients love doing business with us because we are genuinely interested in helping them grow. Securing growth capital shouldn’t be a cumbersome process. We make it easier for borrowers.”

The company and its crowd of accredited investors have the capacity to fund multi-million dollar credit lines, lend to companies in all 50 U.S. states, and work with businesses in various industries including technology, staffing, natural foods, manufacturing, and more.

P2Bi provides access to this pool of working capital for innovative, growing companies. It eliminates many of the barriers associated with traditional financing and the high costs associated with subprime commercial lending. The company uses technology and crowdfunding to lower its effective cost of capital to clients.

Established in 2012, P2Bi officially went to market in January 2014. To date, the company has originated financing to clients in six U.S. states in various industries that include technology, energy, staffing, natural foods, and construction.

P2Bi and its crowd of accredited investors provide businesses with flexible capital that can grow with them; line increases are available as clients need them. The company stands behind its financing by offering a rate guarantee that allows clients to transition, penalty free, to a credit line or term loan with another financial institution if they find a better interest rate.

“P2Binvestor’s funding is a long-term solution that also helps us tremendously in the short term as we aggressively scale our product. It allows us to defer an equity raise, which would have been otherwise unavoidable,” said a company spokesperson for P2Bi’s newest client and recipient of the $2 million credit line. The Boulder company asked not to be named as it prepares for its official public launch.

Both companies are alumni of Finovate, a prominent demo-based conference for innovative startups and established companies in the fields of Banking and  Fin-Tech. Finovate hosts a two-day showcase each spring and fall where leading Fin-Tech companies and startups present their technology business models.

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Registry of Accredited Investors’ Research Reports that General Solicitation Helped Raise $575 Million in 6 Months for Equity Investment Deals

Of 700 companies that filed Form D under the 506 (c) rule, 75% reported fund raising goals of under $10 million with almost 40% indicating offering amounts of $1.5 million or less

By Robert Hoskins

San Francisco, CA – On September 23, 2013, the Securities and Exchange Commission (SEC) began accepting filings under Rule 506 (c), a new method of using general solicitation to raise capital for private businesses through accredited investors.  Many see this new rule as a precursor to Equity Crowdfunding, which will permit regulated internet based fund raising from both accredited and non-accredited investors through approved internet portals.

The Registry of Accredited Investors provides CPA designed verification of Accredited Investor status. Quick, Confidential & Secure

The Registry of Accredited Investors, a private company that provides verification services to accredited investors, reviewed of all the Rule 506 (c) filings filed through Form D – Notice of Exempt Offering of Securities with the Securities and Exchange Commission since the legislation went effective in late September 2013 through mid February 2014.

Michael Berg, CPA, President of the Registry, noted, “That operating companies using the new exemption had reported raising over $575 million in under 6 months. This horse got out of the gate quickly.  The 506 (c) exemption seems very popular with a wide variety of companies.”

Some other highlights noted in the study:

• Over 700 companies have filed 506 (c) forms with the SEC.
• California had the most filings with 139 with Texas, New York and Florida far behind.
• The average reported age of Companies seeking investment was 2 years with a majority of reporting Companies less that one year old. 80% of filers had less than $1 million in annual revenue.
• The main industries using the exemption were Banking and Financial Services, Technology, and Real Estate.
• 75% of all filers reported fund raising goals of under $10 million with almost 40% indicating offering amounts of $1.5 million or less.
• Women represented only 4% of the Chief Executive Officers identified in the filings.

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Lend Academy and NowStreet Media to Host LendIt Peer-to-Peer Lending Conference in New York

By Robert Hoskins

Lend Academy, the preeminent resource for the P2P lending industry, and NowStreet Media, producer of acclaimed financial events that highlight Wall Street transformations, are pleased to announce LendIt, the first global conference for the burgeoning P2P and online lending industry. Peer-to-Peer and online lending (collectively, “online lending”) is a relatively new asset class that is rapidly revolutionizing the credit markets and transforming the global banking industry.

Industry Influencers Introduce LendIt, the Inaugural Peer-to-Peer (P2P) & Online Lending Conference

Online lending seeks to exploit the structural mispricing and funding inefficiencies in the traditional banking sector. Through the use of technology, online lenders are able to compress the cost of originating, servicing, and funding traditional loans. As a result, borrowers receive a lower interest rate while lenders receive a very attractive rate of return. Online lending marketplaces have emerged globally for personal loans, student loans and small business loans. With interest rates at all-time lows and big banks hording cash, online lending marketplaces have tapped into a variety of investor sources ranging from large pension funds all the way down to self-directed individual investors.

LendIt is being held at the prestigious Convene Innovation Center in Manhattan on Thursday, June 20, 2013. The day will bring together the industry’s most influential leaders including: Renaud Laplanche, Lending Club‘s CEO, the largest peer-to-peer lending company as well as Ron Suber, Head of Global Institutional Sales for Prosper Marketplace, the nation’s second largest. Combined, these companies have already originated more than $2 billion in loans.

In addition to a powerful lineup of keynote presentations, interactive panels discussions and extensive networking, the event will feature the world’s first exhibit of peer-to-peer and peer-to-business lending portals.

Attendees will include institutional investors, private wealth managers, family offices and individual investors. Admission tickets can be obtained directly at http://lendit2013.eventbrite.com/. Complimentary press passes will be provided to pre-approved journalists and editorial staff.

Peter Rention,  Lend Academy’s CEO said, “There has never been a more opportune time to launch the LendIt Conference. The recent rapid growth of online lending has captured the attention of large and small investors alike. We look forward to introducing the investing community to the leading online lending platforms, the providers serving the sector as well as the Wall Street firms that are providing innovative financing structures and capital to this new asset class.”

“It is an enormous privilege to be working with Peter whose work is so highly regarded within the P2P industry. I am thrilled to have the opportunity to, once again, break new ground in the Wall Street convention space with the launch of another cutting-edge industry conference,” stated Dara Albright, NowStreet’s CEO.

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Mary Jo White Senate Hearing Testimony Lists JOBS Act Crowdfunding Rules as 1st on SEC Agenda

Testimony of Mary Jo White

Nominee for Chair of the U.S. Securities and Exchange Commission

Before the United States Senate Committee on

Banking, Housing, and Urban Affairs

March 12, 2013

Chairman Johnson, Ranking Member Crapo, and Members of the Committee:

It is my privilege to appear before you today as President Obama’s nominee to be the thirty-first Chair of the Securities and Exchange Commission.

Mary Jo White Confirmation Hearing Chair of the U.S. Securities and Exchange Commission Before the United States Senate Committee on Banking, Housing, and Urban Affairs

There is no higher calling than public service. As the United States Attorney for the Southern District of New York for almost nine years, I worked very hard on behalf of the American people investigating, prosecuting, and punishing those who committed crimes. From white collar criminals to terrorists – regardless of the complexity of the case or the identity of the defendant – we always strove to do the right thing and to vigorously enforce the law. Today, I am honored by the prospect of potentially returning to public service as the Chair of the SEC to help carry out its essential mission.

While I served as United States Attorney, our office worked closely with the SEC investigating and prosecuting violations of the federal securities laws by both companies and individuals. Through that experience, I became a strong admirer of the expertise, independence, and commitment of the Commission and its staff. I fully appreciate the critical role the SEC plays as the primary regulator of our capital markets and as a strong advocate on behalf of investors. Today, in the wake of the financial crisis and in the midst of implementing the substantial legislative mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Jumpstart Our Business Startups Act (JOBS Act), the SEC’s importance and scope of responsibilities are greater than ever.

If confirmed, I will vigorously embrace and carry out the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC’s mission has a tri-partite mandate, but the component parts should not be viewed as in conflict with each other. It is the responsibility of the Chair and the Commission to take the long-term view, balance the objectives when necessary, and seek to fulfill all parts of its critical mission. Then, our markets can thrive and investors will be protected and benefit.

As was true when Chairman Schapiro was first before this Committee in 2009, this too is a crucial time for the SEC. Although the worst of the recent financial crisis may be behind us, none of us can be complacent – least of all the SEC, which has faced a number of its own challenges. Under the leadership of Chairman Schapiro and Chairman Walter, the SEC has made significant strides to strengthen its examination and enforcement functions, improve its capacity to assess risks, and enhance its technology.

Our markets, however, are continuously evolving, and the technology of today is most certainly not the technology of tomorrow. Fast-paced and constantly changing markets require constant monitoring and analysis, and when issues are identified, the investing public deserves appropriate and timely regulatory and enforcement responses.

I am acutely aware that the position of Chair of the SEC carries with it heavy responsibilities and many challenges. But I commit to this Committee and the American public that, if confirmed, I will work tirelessly and do everything in my power to effectively lead the SEC in fulfilling its mission. Let me very briefly highlight a few early priorities were I to be confirmed.

First, I would work with the staff and my fellow Commissioners to finish, in as timely and smart a way as possible, the rulemaking mandates contained in the Dodd-Frank Act and JOBS Act. The SEC needs to get the rules right, but it also needs to get them done. To complete these legislative mandates expeditiously must be an immediate imperative for the SEC.

With respect to rulemaking, rigorous economic analysis is important and should inform and guide the decisions that are made. Although challenging – particularly in the quantification of benefits – in my view, the SEC should seek to assess, from the outset, the economic impacts of its contemplated rulemaking. Such transparent and robust analysis, including consideration of the costs and benefits, will help ensure that effective and optimal solutions are achieved without unnecessary burdens or competitive harm. If confirmed, I would continue the efforts of the Commission to ensure that the SEC  performs robust analysis in connection with its rules and in a manner that does not undermine the SEC’s ability to carry out its mandate to protect investors and our capital markets.

Second, if confirmed, it will be a high priority throughout my tenure to further strengthen the enforcement function of the SEC – it must be fair, but it also must be bold and unrelenting. Investors and all market participants need to know that the playing field of our markets is level and that all wrongdoers – individual and institutional, of whatever position or size – will be aggressively and successfully pursued by the SEC. Strong enforcement is necessary for investor confidence and is essential to the integrity of our financial markets. Proceeding aggressively against wrongdoers is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others who must be made to think twice – and stop in their tracks – rather than risk discovery, pursuit, and punishment by the SEC.

Third, the SEC needs to be in a position to fully understand all aspects of today’s high-speed, high-tech, and dispersed marketplace so that it can be wisely and optimally regulated, which means without undue cost and without undermining its vitality. High frequency trading, complex trading algorithms, dark pools, and intricate new order types raise many questions and concerns. Are they problematic for retail and non-institutional investors? Do they result in unnecessary volatility, or create an uneven playing field? Or do these modern-day features bring benefits such as efficiency, price reduction, and healthy competition to our markets? Do they do all of these things? The experts and studies to date have not been consistent or definitive in their observations and findings about whether and to what extent harm is caused by the current market structure and practices. There must be a sense of urgency brought to addressing these issues to understand their impact on investors and the quality of our markets so that the appropriate regulatory responses can be made. If confirmed, I will work not only to ensure that the SEC has the cutting-edge technology and expertise necessary to enable it to keep pace with the markets and its responsibilities to monitor, regulate, and enforce the securities laws, but also to see around the corner and anticipate issues.

There are, of course, many other important areas within the jurisdiction of the Commission: from money market funds to private fund advisers, from credit rating agencies to clearing agencies, from the appropriate standards and regulations governing the conduct of broker-dealers and investment advisers when providing investment advice to retail customers to how to make public issuer disclosures more meaningful and understandable to investors, to name just a few. If confirmed, I would focus on these and the many other challenges facing the SEC.

In conclusion, it would be my privilege and honor to work with the men and women of the Commission and this Committee to help carry out the SEC’s mission. Thank you for considering me to serve in this capacity and for the opportunity to appear before you today. I would be happy to answer your questions.

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