Crackdowns on online capital raising and secondary trading

Yesterday at the SOCAP conference, Dana Mauriello of Profounder shared that the California Department of Corporations has made it clear that online securities offerings are not okay without a broker-dealer license.

The SEC is also looking at online secondary trading sites like SecondMarket and SharesPost.

According to a post by peHUB Wire, “U.S. Securities and Exchange Commission officials in March met with secondary market executives to warn them of impending regulatory changes. . . .  The regulators told the executives that they want more stringent checks of individuals’ accreditation and improved diligence regarding the financials of companies being auctioned to investors . . . .”

The take home message?  Buyer beware!  Before using an online platform for capital raising, do some due diligence to make sure you don’t inadvertently violate the securities laws!

Cutting Edge Capital

About Cutting Edge Capital

Cutting Edge Capital provides small and mid-sized businesses with the information, tools, and expertise they need to raise capital in a way that fits with their unique business model and long-term goals. Email us at info [at]

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