Candace Klein Out As SoMoLend CEO Amid Questions Of State Motivations

Candace KleinCandace Klein has stepped down as CEO of SoMoLend. Klein was recently the subject of a notice from the Ohio Division of Securities in relation to fundraising efforts and business dealings on behalf of lending-based crowdfunding platform SoMoLend. Klein says that her decision was made because “what SoMoLend is trying to accomplish is more important than (Klein) being at the helm.”

Ben Dusing is a partner at Adams, Stepner, Woltermann & Dusing and an attorney for Candace Klein. In an article published today in the Cincinnati Business Courier, Dusing raises questions about the motivations of state regulators. He alludes to the persecution of Klein being a response to her highly publicized role in the greater crowdfunding landscape. In his words, “there are indications that something is amiss.”

somoLend-2_copyDusing argues that the JOBS Act takes power out of state regulators’ hands, and that could be the motivation behind why, in his words, a “regulatory agency would seemingly go out of its way to persecute Candace.”

Charles Stamm was also very vocal in his support of Klein in our article earlier this week, and he has released the following statement in regards to these allegations of fraud against Candace Klein on behalf of SoMolend.

“Recent news reports have indicated investors were somehow misled by the leadership of SoMoLend into investing into this important company. From my perspective as an investor in SoMoLend, nothing could be further from the truth. SoMoLend’s investors were fully aware of the risks and rewards of investing in this startup company and were in no way misled by Candace Klein. SoMoLend’s investors have received regular updates, detailing company’s financial results and continue to believe in the mission and viability of the company’s business model. I am greatly concerned about what we believe to be unfounded allegations of fraud against the company by the state of Ohio. To my knowledge no investor complaint has been lodged against SoMoLend. If the investors don’t believe they were misled or harmed, where is the fraud?”

“The majority of SoMoLend investors and all of SoMoLend’s employees live and pay taxes in Ohio. Further a significant amount of money from Ohio Third Frontier Funding was invested in SoMoLend, so in essence, along with SoMoLend investors, Ohio taxpayers will also be hurt by the impact of the State’s allegations.” The State of Ohio has been critical of the JOBS ACT and provisions for Title lll Crowdfunding since the act became law. I believe it is their intent to try make an example of SoMoLend.”

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  • sallfham

    Those who benefit from fraud, directly or indirectly, will always be the first to defend it. Especially those whose jobs depend on it, or whose investments in the fraudulent enterprise are illiquid.

    Frauds also justify their actions on the grounds that investor or consumer protection laws either don’t pertain, are being selectively applied, or are archaic. Excuses one and two rarely stand up to the plain facts. And while laws may need changing, they must be enforced while they are in effect.

    Congratulations to the Ohio Division of Securities for doing its best to cut through the happy talk about “social” investing, the charismatic promoters, and speak up for the interests of all wish to invest in markets that are transparent, accountable, and well regulated.

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