On Crowdfunding, Watch Out for State Regs

In talking to one of our clients this morning about crowdfunding, it occurred to me that when doing a listing for debt or, especially, equity, that you be sort of in compliance with state regulations.

This topic has also been a topic of discussion and regulation by the Securities and Exchange Commission. They are eyeing many crowdfunding sites and posts to see if they’re sort of in compliance with securities regs.

Here in ol’ backward Arizona, the state regulators have also been known to be confused by the difference between debt and equity. We won a case on this matter several years ago, but, since we don’t have loser pays, the State didn’t reimburse us $31,000 in legal fees. If Arizona is confused odds are other states are. And, if they have big enforcement arms, the governments will take you to court. Or a creditor could, as happened to us.

So, some words to be wise…..

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