SEC Looking At Angel Groups

The SEC has “investigated every angel group they know of” out of concern that the groups may be operating as unregistered broker-dealers, according to Steve Murchie, president of the Denver Keiretsu Forum.

Murchie’s chapter (UPDATE: and the rest of the Keiretsu Forum) got a “no-action” letter from the SEC last year — meaning the group had not, in the SEC’s opinion, violated any federal securities laws — but SEC scrutiny adds to the pressure on angel groups to find a workable business model, Murchie said, particularly as individual angel investors pull back after they look at what the global financial crisis has done to their portfolios.

Denver Keiretsu Forum itself plans to shut down next month, after being unable to get enough members to become self-supporting (the group lost money in 2007 and 2009 – losses that Murchie will have to personally absorb).

Deborah Gage

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