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Federal Crowdfunding Goes into Effect on May 16, 2016 (Part VI)

June 14, 2016

Fix Crowdfunding Act.  

We have been blogging about federal crowdfunding in this blog series this past month or so. As you know, Title III of the JOBS Act, also referred to as the “CROWDFUND Act (Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012),” exempts up to $1 million crowdfunded securities from the federal registration requirement when the transaction is conducted in certain ways.[1] For a detailed analysis of the final rules, please see our previous blog series “Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules.” Even before the final rules went into effect, however, efforts to amend Title III had been underway.… Read the rest

Federal Crowdfunding Goes into Effect on May 16, 2016 (Part V)

June 7, 2016

SEC Small Entity Compliance Guide and Compliance and Disclosure Interpretations for Issuers.

On May 13, 2016, the Securities and Exchange Commission (“SEC”) released two guidance documents on crowdfunding for issuers: “Regulation Crowdfunding: A Small Entity Compliance Guide for Issuers” and “Regulation Crowdfunding: Compliance and Disclosure Interpretations (C&DIs).” [1]  For details of the final rules, including requirements for issuers, please see our previous blog series “Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules.” The compliance guide and C&DIs explain the final rules in plain English, some of which we highlight below.… Read the rest

Federal Crowdfunding–Finally Here–Goes into Effect on May 16, 2016 (Part IV)

May 31, 2016

FINRA’s Funding Portal Rules.

The federal crowdfunding final rules require that each intermediary in a crowdfunding transaction be registered with the Securities and Exchange Commission (“SEC”) either as a broker-dealer or a funding portal and be a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), which is currently the only registered national securities association. For details of the final rules, including registration and disclosure requirements for intermediaries, please see our previous series “Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules.” FINRA has finalized its funding portal rules and the SEC approved them on January 29, 2016, making them effective as of that date.Read the rest

Federal Crowdfunding–Finally Here–Goes into Effect on May 16, 2016 (Part III)

May 24, 2016

SEC: A Small Business Compliance Guide on Registration of Funding Portals.

On February 29, 2016, the Securities and Exchange Commission (“SEC”) issued “A Small Entity Compliance Guide: Registration of Funding Portals.” [1] The full text of the investor bulletin is available here. One of the requirements for crowdfunding under JOBS Act is that it be done through an intermediary; no issuer can do crowdfunding directly without using one. [2] For details of the final rules, including registration and disclosure requirements for intermediaries, please see our previous series “Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules.” The compliance guide focuses only on the registration requirements.Read the rest

Federal Crowdfunding–Finally Here–Goes into Effect on May 16, 2016 (Part II)

May 17, 2016

SEC Investor Bulletin: Crowdfunding for Investors.

Crowdfunding under federal law became legal on May 16, 2016, but efforts to prep potential investors and intermediaries have been in the works for much longer. On February 16, 2016, the Office of Investor Education and Advocacy of the Securities and Exchange Commission (“SEC”) issued “Investor Bulletin: Crowdfunding for Investors” [1] to educate investors about what it means to make a crowdfunding investment, what to keep in mind, and how. The full text of the investor bulletin is available here.Read the rest

Federal Crowdfunding Goes into Effect on May 16, 2016

May 10, 2016

It is official—federal crowdfunding finally goes into effect on May 16, 2016.

Title III of the JOBS Act, also referred to as the “CROWDFUND Act (Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012),” exempts up to $1 million crowdfunded securities from the federal registration requirement when the transaction is conducted through an intermediary that is either a broker or a funding portal.[1] For a detailed analysis of the federal law and related topics, please see our previous posts “Crowdfunding: Is It Right for My Business,” “Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules,” and “An Easy Way for Texas Companies To Raise Money?Read the rest

SEC Issues an Investor Alert on Social Media and Investing (Part II)

March 15, 2016

SEC v. Craig.

On November 5, 2015, the Securities and Exchange Commission (“SEC”) filed securities charges against James Alan Craig, a 62-year-old Scottish trader.[1]  The SEC’s complaint concerns Craig’s use of Twitter accounts to commit securities fraud by making false statements about publicly traded companies in order to manipulate the price of those companies’ exchange-traded securities.  Just as the SEC warned in the investor alert of fraudsters who conceal their true identities by mimicking credible sources of market information, the complaint alleges that Craig created the Twitter accounts to mislead the public into believing that tweets issued from those accounts were from established securities research firms. … Read the rest

SEC Issues an Investor Alert on Social Media and Investing (Part I)

March 3, 2016

On November 5, 2015, the Securities and Exchange Commission (“SEC”) issued an investor alert to warn investors about fraudsters who attempt to manipulate share prices through social media.[1]  For a full text of the investor alert, click here.  With the prevalence of social media and their increasing usage in market research, this seems to be a particularly appropriate topic for an investor alert.

In the investor alert, the SEC warned that, while social media can provide many benefits for investors, such as stock research and up-to-date news, it also presents opportunities for fraudsters to spread false or misleading information about a stock to large numbers of people with minimum effort and at a relatively low cost. … Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.