CrowdCheck Blog
Delivering All Things Crowdfunding and Online Investing
May 16, 2013 by Brian Knight
This week has been a good week for the SEC, mostly in the sense that they aren’t the IRS (please don’t audit me). But it hasn’t been a good week for the millions of entrepreneurs and investors still waiting for the SEC to finalize the rules for the securities-based crowdfunding established by last year’s JOBS act. Every day that goes by without rules means more businesses without needed funding, more investors without meaningful investment opportunities, and greater uncertainty about whether crowdfunding as controlled by the SEC’s regulations will be viable. This uncertainty, more than anything else, is killer for small businesses.
Skeptics have accused the...
This entry is filed under Crowdfunding, In The News, SEC, Section 4(a)(6), Securities Law, Blog
May 14, 2013 by Brian Knight
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Last month we were fortunate enough to get a bunch of really smart people together to talk about how investment crowdfunding should be regulated...without it being overregulated. Many of you were there, but if you couldn't make it, or just want to relive the memories we have a treat: the conference videos. Enjoy!
This entry is filed under Securities Law, Video
May 06, 2013 by Sara Hanks
Everyone in the startup world knows a good pivot story, right? The wedding planner site that became a peer-to-peer boat rental outfit, the “gay Groupon” that became a fabulously successful retailer. It’s not that unusual for a team to find that their original concept just isn’t going to work, but they have this other idea that is going to disrupt some totally different industry. If they are operating on their own money, no one cares. If they’ve already raised funds then they may have to have some uncomfortable conversations with their angel or VC investors. But the likelihood is that those investors have been watching the business closely, may have a board...
This entry is filed under Crowdfunding, Disclosure, Fraud, SEC, Securities Law, Blog
April 23, 2013 by Andrew Stephenson
The New Year has come and gone and we are done with the first quarter of 2013, and yet we are still without SEC rules to implement crowdfunding as authorized by the JOBS Act. While some commenters on the SEC JOBS Act comment section have resorted to unproductive heckling of the SEC to get a move on, the rest of us understand what is at stake for crowdfunding and the need to get the rules right.
On April 8, 2013, CrowdCheck hosted our Second Annual Crowdfunding Conference. The conference title was "Fraud and Red Tape: Risks to the Potential of Securities Crowdfunding". We spent some time working on the title in order to highlight that there are two competing...
This entry is filed under Crowdfunding, Fraud, SEC, Securities Law, Blog
April 04, 2013 by Sara Hanks
JOBS Act Creates Crowdfunding Industry but No IPOs
This entry is filed under In The News, Blog
April 04, 2013 by Sara Hanks
Crowdfunding’s on Hold. So is Crowdfunding Fraud.
This entry is filed under In The News, Blog
March 26, 2013 by Brian Knight
The CrowdFundCast went to South by Southwest interactive festival to spread the joy…err…calm feeling of properly done due diligence. It was a great but time devouring experience, which we talk about here.
This entry is filed under Podcast
March 18, 2013 by Andrew Stephenson
Last Friday, the Department of Justice and the Consumer Protection Working Group held their annual summit on consumer protection. The summit highlighted the latest scams and what consumers can do to protect themselves.
The Internet and social media have made it easier for scammers to contact and fool unsuspecting individuals with lottery scams, romance scams, unlawful debt collection practices, and health scams. Common features of all of these scams are unsolicited contacts and advance fees paid to an organization the individual has never dealt with before.
These common features—unsolicited contacts and advance fees—distinguish these frauds from securities...
March 01, 2013 by Andrew Stephenson
Ever since the Internet became a medium for communication, fraudsters and scammers have tried to use it to steal money from overly-trusting individuals. When it comes to the sale of securities, the SEC warns that fraudsters commonly try to trick investors through online investment newsletters, bulletin boards, and pump and dump schemes.
Fraudulent online offers of securities are a commonly used scam because the promise of receiving a return may blind the investor to the holes in an otherwise reasonable sounding proposal. For example, online investment scammers can take advantage of cognitive biases that will make their proposal sound even better merely...
February 25, 2013 by Andrew Stephenson
On Friday at the "SEC Speaks" conference, Securities and Exchange Commissioner Troy Paredes observed that the information companies disclose to investors leads to "disclosure overload" that hampers the ability of investors to gauge the importance of the data. Commissioner Paredes went on to say "what we need is a top-to-bottom review of our disclosure regime."
At CrowdCheck, we agree with Commissioner Paredes. The value of disclosure is significantly increased when presented in a readable format that does not overwhelm the investor. While the information presented in an opaque document may be the same as that of a readable document, the impact is very...
This entry is filed under Disclosure, SEC, Blog