Nevada Secretary of State Cites Three Criminal Convictions As Warning To Crowdfunders

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The Nevada Securities Law (Chapter 90 of Nevada Revised Statutes) is administered and enforced by the Securities Division of the Nevada Secretary of State. Last week, Nevada Secretary of State Ross Miller issued this press release warning investors that three separate criminal convictions in Nevada “point to potential trend in illegal crowdfunding”. According to the press release, “in each case it was believed that the seller utilized the internet to offer or promote securities”. Secretary Miller then explains the current status of crowdfunding as follows:

Crowdfunding is generally defined as a method of financing or funding a project with relatively small contributions from a large group of individuals, often conducted online through dedicated crowdfunding sites. Although the Crowdfund Act was signed into federal law in April 2012 as part of the JOBS Act, the SEC has not yet passed regulations governing crowdfunding, so the process may not be utilized by those issuing or selling unregistered securities. Nonetheless, numerous internet sites have cropped up since April poised to offer crowdfunding investment opportunities.

This advice is, of course, consistent with the following caution that appears on the Securities and Exchange Commission’s website:

Until then, we are reminding issuers that any offers or sales of securities purporting to rely on the crowdfunding exemption would be unlawful under the federal securities laws.

Lucia Dagen

Today is St. Lucia’s Day. Essentially, this involves a daughter, a white gown with a red sash and a crown with candles (now electric). The daughter brings coffee and lussekatter (saffron flavored buns) to the parents. If you can’t imagine the scene, check out Carl Larsson’s 1908 painting or these more recent pictures from Sweden.

 

Topics:  Crowdfunding, SEC, Securities

Published In: Communications & Media Updates, Criminal Law Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

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