The Pitfalls Of Crowdfunding

Law360, New York (November 26, 2014, 2:44 PM EST) -- The Jumpstart Our Business Startups Act was expected to create and expand opportunities for people to invest directly in a wide variety of commercial projects through what is known as "crowdfunding." The act attempts to reduce and streamline the statutory and regulatory barriers that apply to the operation of online crowdfunding platforms. But crowdfunding, while exciting, poses risks. As the popularity of investments through this burgeoning industry increases, businesses should keep in mind the risks and avoid potential pitfalls, such as liability for failure to register and liability under federal securities laws, state securities laws, and generally applicable common law principles and statutes....

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