SEC warns against crowd-funding

May 15, 2012

Dan Primack was a senior editor at Fortune from 2010 to 2016. He was also the author of Term Sheet, Fortune's daily newsletter about deals and dealmakers.

FORTUNE -- The Securities and Exchange Commission today issued the following statement:

On April 5, 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law. The Act requires the Commission to adopt rules to implement a new exemption that will allow crowdfunding. 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.

No idea how much attention the reminder will get, but it's necessary. Ever since the JOBS Act passed, it seems that a new crowd-funding platform has launched each day. There was even a conference yesterday devoted to the "market."

Some of the JOBS Act regulations already have gone into effect, including the one that allows private companies to confidentially file public offering documents for SEC review. But others, including many of the crowd-funding and revised solicitation guidelines, remain in limbo for the next couple of months.

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