Crowdfunding Efforts Draw Suspicion

Obama Jobs Act

Regulators are scrutinizing about 200 websites set up by entrepreneurs to profit from a more lenient law on the sale of shares in small companies.

State securities officials identified the websites after a sweep of thousands of Internet addresses for possible threats to investors following the looming change.

The probe was triggered by the Jumpstart Our Business Startups, or JOBS, Act, which dismantles many of the legal constraints on small companies selling shares on the Internet.

Securities laws currently prohibit private companies from advertising or selling shares to investors who aren’t relatively wealthy. The JOBS Act will allow companies to raise up to $1 million a year through small share sales to ordinary investors.

Read More at WSJ.com



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