State Regulators Continue Their Misinformation Campaign on Crowdfunding—In an effort to Delay Implementation of the JOBS Act
Austin, TX -- (SBWIRE) -- 12/11/2012 -- In an effort to increase access to capital to small business owners, the life blood of the American economy, Congress and the President passed the JOBS Act earlier this year. This bill was designed to help jump start small businesses by increasing access to capital and decreasing legal expenses. While the Crowdfunding provision of this bill is months away from implementation and currently not occurring in any form in the U.S., the North American Securities Administrators Association (NASAA) has launched a misinformation campaign about Crowdfunding, by associating a clear-cut fraud case with Crowdfunding.
“Crowdfunding isn't legal yet. We are still waiting for the rules to be written by the SEC and FINRA. So in reality what happened in the story is just fraud that was perpetrated under the current regulatory regime,” stated Jason Best, Co-founder of the CfPA.
Crowdfunding, when it does go live (by law) must take place on SEC-registered websites only. These websites aren’t live yet and hence isn't crowdfunding.
Unlike boiler rooms that can operate from hidden locations anywhere, all Equity Crowdfunding Platforms will be accredited and operating in full view of the social media crowd, which will be a very transparent process for every investor that does their homework and researches companies before making an investment. The Crowdfunding industry will be going to great lengths to educate the general public and significantly increase the world’s knowledge of making wise investments.
“It is so farfetched to blame Crowdfunding, a yet-to-be employed investing mechanism, for a boiler-room scheme that was perpetrated over a year ago,” said Dara Albright, CfPA Board Member and Founder of NowStreet Journal. “Equally absurd is suggesting that the increase in domain names containing the word, ‘crowdfunding’ is indicative of future fraudulent behavior. It is a clear violation of American democracy for regulatory organizations to launch smear campaigns and propagate falsehoods about industries it will soon help oversee.”
“Security violations of the SEC’s current regulations are enforced rigorously,” said Sherwood Neiss, Co-Founder of the CfPA. “This trend will continue as the Crowdfunding industry establishes itself in the United States and is expected to follow a zero-fraud precedent that has been set in Australia for the past seven years and in the United Kingdom for the past two years.”
All media outlets are encouraged to contact the CfPA with questions regarding the new SEC guidelines that are due out later this year and into the early part of 2013. Please review SEC’s FAQ Sheet at: http://www.sec.gov/divisions/marketreg/tmjobsact-crowdfundingintermediariesfaq.htm?goback=%2Egde_4401102_member_114785550