Steve Lynch: “In the interest of investor protection, my amendment would prevent H.R. 2799 from taking effect unless the Securities…”

“In the interest of investor protection, my amendment would prevent H.R. 2799 from taking effect unless the Securities and Exchange Commission certifies to Congress that this misguided legislation will not increase the amount of fraud in our financial system. Importantly, this certification would be based on SEC consultation with our State securities regulators. As ranking member of the Subcommittee on Digital Assets, Financial Technology and Inclusion, I am strongly supportive of reducing barriers to capital market participation in a manner that maximizes investor protection, regulatory oversight, and responsible capital formation. Unfortunately, this bill removes basic protections and promotes reckless deregulation at the expense of all three. Not surprisingly, our State securities regulators are overwhelmingly opposed to the so-called Expanding Access to Capital Act because it would preempt critical State laws that are in place to protect retail investors against fraud and other financial misconduct. In my own State of Massachusetts, our longtime Secretary of the Commonwealth and chief securities regulator, Bill Galvin, reports this bill would significantly undermine the State's ability to regulate financial middlemen such as finders and private placement brokers and that these financial intermediaries regularly promote private investments that are both high risk and nonliquid.…”