Tuesday, March 13, 2012
I have blogged several times about proposed crowdfunding legislation and expressed my deep concern that it will facilitate the defrauding of small investors. Today I got a press release from Senator Scott Brown, touting the Crowdfund Act "which will boost job growth in Massachusetts by empowering new small businesses and aspiring entrepreneurs to raise capital from a wide range of small dollar investors." The Act will:
"Allow entrepreneurs to raise up to $1 million per year through an SEC-registered crowdfunding portal.
"Free people to invest a percentage of their income. For investors with an income of less than $100,000, investments will be capped at the greater of $2,000 or 5% of income. For investors within an income of more than $100,000, investments will be capped at 10% up to $100,000. (emphasis added)"
Does it make it okay to take unsophisticated investors money so long as the amount is capped?