Under SEC rules, disclosures to investors must be true and correct, but what about crowdfunding?
The Wall Street Journal points out that some crowdfunding campaigns aren’t quite there yet. For example, Ritot failed to disclose that it was located in the Ukraine and used false names.
This is primarily due to the fact that the portals undertake virtually no due diligence on their issuers. Their terms of service essentially say “caveat emptor” (buyer beware) and they believe that the crowd will smell out the fakers.
The two largest sites don’t offer refunds and require the issuers and their donors to work out any conflict while the sites keep their cut.
You can report crowdfunding scams here: http://kickscammed.com/