"SEC Wants To Regulate All Crowdfunding" Topic

Grabbed this from another site.

The SEC Wants To Regulate All Crowdfunding

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"Proposed new rules require that funding portals register with the Securities and Exchange Commission and the Financial Intermediary Regulatory Authority. In addition, investors must have access to a business plan, use of proceeds, a valuation of the company, and financials, so Certified Public Accountants may be needed. The SEC estimates that for amounts under $100,000 USD, the fees will be 12.9% to 39% of the money raised, though it may drop to under 8% for higher amounts."

Words fail me….

When there is money moving around. The Gov't wants it's cut…

Not surprising.

That's good. Definitely want to take 39% up front. Heck, why stop there? Maybe 100%? We could even eliminate the middle-man and have the Federal government do a "keep us running!" Kickstarter.

The proposed rules report was 538 pages………

Ahh but they missed the loop hole. crowdfunding isn't investing. It never was and never will be. That is why you don't need to see a business plan or pay stupid fees.

Worst case that I can see is a tax maybe but then you get into the mine field of internet tax and that brings out the pitch forks and torches.

However, It would be an interesting tactic for a budding company hoping to crowd fund a new project to release the company business plan and a plan of action for manufacturing. Maybe even toss in the actual projected numbers but that might be overplaying your hand unless your boot strapping a company and don't plan to make any cash.

How dare the common folk try to have access to funding with out the 1%'ers controlling it.

Y'know, we TRY not to talk about politics around here, and then these yahoos go and get politics all over our hobby.

At what point do we get together to form a TMP PAC?

If you want, get me in front of these TW*Ts so I can use my useless right leg to give them a good kicking in the shins. Tw*nky bullys that they are, only pain will shake the brillcream out of their slickbacks.

Ahh but they missed the loop hole. crowdfunding isn't investing. It never was and never will be.

Don't worry. They'll just have one of the faceless regulators declare it to be "investing".

NEVER come between the government and a new source of revenue.

crowdfunding isn't investing

It's considered gambling proceeds isn't it?

It's more like buying stock in the Green Bay Packers.

And if the project goes through, pay off the SEC with a bag of 32mm Martian hoplites.

And if it fails, hello Max Bialystok! (Which is what I thought it was all about anyway. Romancing those elderly widows…)

Here's a link to the actual proposal:

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And a link to the press release by SEC:

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Guys, this rule pertains to the offer of securities by crowdfunders, and I don't think it will cover any sale of products like we are concerned about.

So, the Crowdfunding Industry just moves its official location to a country with more friendly regulations.

I'm already seeing non-US companies specifically banning US residents or citizens from acquiring shares and prohibiting the distribution of prospectus documents to the US.

Rwphillipsstl is right

Crowdfunding describes an evolving method of raising capital that has been used outside of the securities arena to raise funds through the Internet for a variety of projects ranging from innovative product ideas to artistic endeavors like movies or music. Title III of the JOBS Act created an exemption under the securities laws so that this type of funding method can be easily used to offer and sell securities as well. The JOBS Act also established the foundation for a regulatory structure for this funding method.

I think we are safe for now. But I've had to put my plan to sell Crossover Miniatures Securities on the back burner for a bit.

I had not thought about crowdfunding in this light, but historically the unregulated sale of ownership interests in sham businesses and business plans has been a MAJOR source of financial fraud in this country. I actually support closing this loophole to prevent sharks from scamming people into investing in their new "widget manufacturing company" with a promise of 50% annual returns.

Definitions, including that for "security":

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I can't believe you're surprised.

DM

Strikes me crowdfunding would be ideal for money laundering. A new line of plastic minis, collect the money and never deliver more than a couple of figures. Refund anyone who complains and take the cleaned money from the less legitimate.

They want to regulate and tax everything, AND have, including rainwater falling from the skies onto people's "private propertly".

I would've thought it was enough that the SEC wins the national title just about every year.

Again, a bunch of knee-jerk reactions and only a couple of people who actually read the article.

If many of you had actually read it instead of getting your Sarah Palin branded pitchforks out you'd realize some of these laws would allow something that is currently illegal in this country and set guild-lines so you have less of a chance of getting ripped off. But please keep letting your irrational hatred of the government run rampant, it's entertaining. :)

In defense of those who overreacted, the whole issue is a bit confusing. The actual SEC materials are written in a way that while they do talk solely about securities, the clear confusion/overlap with typical Kickstarter initiatives was bound to create misimpressions. I looked around for something that clearly described what they were NOT regulating and could not find anything. I still worry that some Kickstarter-type offers will accidentally stray into running afoul of the rule. The preamble to the SEC proposed rule really should have said more about what they were leaving alone.

It's pretty clear that it's just about crowdfunding that offers investment in a company, something that kickstarter type places already don't allow. And really shouldn't given the number of crash and burns the system has already had.

It's really unfortunate that the sensationalists got to write the headlines on these articles, but there's really nothing to see here.

They don't seem too worried about all of the, officially sanctioned, and "approved at the highest levels" funding failures of late.

Those usually are in the tens of billions of dollars.

Here's a nice article for those who want to be informed rather than just hyped

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