Thursday, December 6, 2012

Crowdfunding Fraud? No...

We noticed an article in the news today about the first supposed case of crowdfunding fraud. According to the article,

"Commonwealth Secretary William Galvin filed fraud charges against two out-of-state oil and gas operations in connection with their sale of unregistered securities to Massachusetts investors. In one, Prodigy Oil and Gas LLC allegedly employed a cold-caller who had been found guilty of theft. According to the complaint, Prodigy principal Shawn Bartholomae was subject to three state securities regulatory actions and two criminal charges."

Here is the thing to keep in mind: these guys would be committing fraud even if crowdfunding did not exist. That's one of two ways you know the tie to crowdfunding is bogus. 

This is the Commonwealth Secretary acting on behalf of large financial institutions to try and scare investors away from crowdfunding. The other way you know this is bogus? Simply keep track of donations to this specific politician from big financial institutions. The real question is this: what was this regulator doing to protect the public in the years leading up to the financial crisis?

I thought things might come to this, and talk about it in a number of places. See:
http://www.thestreet.com/story/11780547/1/businesses-brushed-off-by-banks-look-to-customers-for-funding.html
http://under30ceo.com/ignore-the-naysayers-the-jobs-act-will-create-jobs/
https://www.facebook.com/CrowdfundingBook

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