It’s A Contract

If I promise to deliver to you product X in exchange for $Y, what is that? It’s a legally binding contract. If I take your $Y, put it in my personal bank account and do not deliver your product X within a reasonable time, what is that? That could be fraud. So, surprise, even without the sale of securities, engaging in a crowd funding campaign presents potential legal liability to companies seeking funding. And the words used could spell the difference between “puffing” and bankruptcy.

Read the story: http://www.inc.com/eric-markowitz/when-kickstarter-investors-want-their-money-back.html

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About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in Broker dealers, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, FINRA, Funding Portals, Investments, SEC, Small Business, Uncategorized and tagged , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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