Tagged: legal

SAFEs: The Investment Vehicle of Choice for Reg CF Issuers?

Simple Agreement for Future Equity

  Exploring the emerging role of SAFEs or Simple Agreement for Future Equity in Reg CF offerings.   Examining SAFEs pros and cons to founders and financiers investing in seed stage companies. You’ve started a new business, established your team, and you’ve self-funded all of… Read More

Solicitor General’s Office Slaps Down Second Circuit Madden Holding as Erroneous

Midland vs Madden Supreme Court 2

After being invited to file a brief to the Supreme Court, the Solicitor General’s Office filed a brief this past Tuesday, May 24, 2016 and weighed in on the Madden v. Midland Funding, LLC case. Or rather, by weighing in I mean they blatantly shot… Read More

SEC Commissioner Piwowar Nails it in Remarks to ACSEC Discussion on Accredited Investor Definition

Michael Piwowar ACSEC 2

“Should the Commission consider doing away with the notion of a so-called “accredited investor” altogether?” The above question is posed not by this digital publication but by a sitting SEC Commissioner, Michael S. Piwowar. The Commissioner was speaking at the recent gathering of the Advisory… Read More

Intrastate Crowdfunding: The Often Overlooked Option 

United States Map Money

With the Federal Title III rules effective, there is certainly a lot of excitement surrounding national level “retail” crowdfunding to non-accredited investors. That’s obviously great news for the industry, but it’s important to remember that the majority of the states currently have some form of “intrastate”… Read More

What is Title III Crowdfunding and Why Should I Care?

REGULATION CF TITLE III

Overview of the regulatory framework Although the Jumpstart Our Business Startups or JOBS Act was passed in April of 2012, the rules implementing Title III of that Act relating to retail investment crowdfunding have been a long time coming. They were finally promulgated on October… Read More

Moody’s Calls Class Action Lawsuit Against Lending Club a Negative for Entire Sector

Rating’s agency Moody’s has published a report that is critical of the marketplace lending sector. Pointing to the class action lawsuit filed in a US District Court against Lending Club (NYSE:LC) on April 6th, Moody’s states that owners of Asset-Backed Loans (ABS) face legal challenges… Read More

CFPB Takes Action Against Online Lead Aggregator for Loans

Richard Cordray testifying 1

The Consumer Financial Protection Bureau (CFPB) filed suit in federal court against co-founders who allegedly sold consumer loan applications without appropriate safeguards.  The loans were said to be sold containing sensitive personal data without assessing the sources of the leads nor the purchasers they sold… Read More

Crowdfunding is Crowdfunding to a Crowd: But Any Other Name Would Work As Well

The Crowd Benjamin Money Stadium

Exploring the dynamics of equity crowdfunding and provoking thought about what crowdfunding means to you.  Crowdfunding has always existed, and will continue to exist, as long as there are people and scarcity of resources. People have pooled and transferred resources for the benefit of another,… Read More

Report: SEC Has Received 30 Applications for Title III Crowdfunding Portals

Reg CF Title III

Title III crowdfunding will join the other two variants of investment crowdfunding, Title II and Title IV (Reg A+) this coming May to create a more vibrant capital ladder for companies seeking to raise capital using the internet. While no exemption is perfect, both accredited… Read More

Complying with AML Laws: Challenges for the Fintech Industry

Money Dollars Art 100

  “Silicon Valley is coming.  There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.” This warning came not from a pundit or Silicon Valley lobbyist, but from Jamie Dimon, the Chairman and Chief Executive Officer… Read More

A New Bill Looks To Fix The Current “S Corp” Rules For Easier Crowdfunding; Why It Needs To Do More

Investigation Money Inquiry

A new Bill (H.R. 4831) was recently introduced by Representative J. French Hill which looks to amend the rules of the Internal Revenue Code of 1986 (the “Code”) concerning  “subchapter S” qualified corporations (“S Corps”), and the limited number of permitted S Corp shareholders, to… Read More

Reg A+: A Successful First Year Despite Regulatory Ambiguities 

Regulation A+ SEC

The “democratization of investment” in historically closed industries have been the buzzwords of choice since the JOBS Act was signed into to law in 2012. But only since March 25, 2015, when the SEC voted to adopt the proposed rules implementing Title IV, was access… Read More

Crowdfunding Platforms Must Be Conscientious In Disclosing Borrower Credit Information

Guard Safety

  In translating the JOBS Act into final regulations, the SEC sought to protect investors in myriads ways: limiting certain opportunities to accredited investors, implementing caps on the annual amount certain investors may invest, and requiring certain disclosures, among other things. Understandably, the bulk of… Read More

Real Estate Related Crowdfunding & P2P Lending Surge in China: Opportunity or Crisis? 

Beijing_northeast

The property prices in China’s major cities has surged in recent months, first in Shenzhen, then Shanghai and Beijing. The rapid appreciation of property is drawing people’s attention back to the concept of real estate crowdfunding. Four types of real estate crowdfunding Real estate crowdfunding… Read More

Scottsdale Capital Advisors Challenges FINRA Authority to Regulate in Federal Court

Accountability

Scottsdale Capital Advisors Corp is challenging the Financial Industry Regulatory Authority’s (FINRA) ability to act as a securities regulator in Maryland federal court by stating it does not truly have a Congressional mandate to wield such power. The lawsuit is in response to proceedings pertaining… Read More

The Netherlands is Set to Update Debt & Equity Crowdfunding Rules

Anne Hakvoort

On April 1st, the regulatory environment for investment crowdfunding will change in the Netherlands. The Netherlands Authority for Financial Markets (AFM) published recommendations in December of 2014 regarding a regulatory approach for internet finance. A proposal was released back in December that was summarily updated the… Read More

Ex-Fundrise CFO Tells Washington Post “Extortion Allegations are Baseless”

Boxing Gloves Fight Box

Last month, Crowdfund Insider reported that Fundrise had terminated its CFO for allegations of extortion.  In a filing with the SEC, Fundrise CEO and founder Ben Miller stated; “I am saddened to have to inform you that an employee of our company has engaged in… Read More

Lawsuit Filed Against iFunding “Discontinued with Prejudice”

Gavel Dismissed

In a pretty big win for the real estate crowdfunding platform iFunding, the lawsuit filed against it by CapStack Partners was “discontinued with prejudice in all respects” yesterday. Crowdfund Insider reported in January that CapStack Partners had filed a grievance with the Supreme Court of… Read More