The Washington State Department of Financial Institutions joins the North American Securities Administrators Association in warning investors about the potential dangers of crowdfunding.
The Internet has become an inexpensive and easy way for individuals and businesses to raise money for their activities. Congress recently passed the JOBS Act, which directs the Securities and Exchange Commission (SEC) to create rules exempting crowdfunding from the securities registration laws. Once implemented these rules will remove restrictions on start-up companies seeking investors over the Internet. Investors should be on the lookout for unscrupulous issuers and intermediaries who may attempt to engage in crowdfunding before the rules are written or misuse crowdfunding to steal from investors through false and misleading representations.
View the full alert on the North American Securities Administrators Association website at www.nasaa.org/12842/informed-investor-advisory-crowdfunding