by Chris Newmarker for finance-commerce.com
The U.S. Securities and Exchange Commission appears to be in no hurry when it comes to creating a framework for a business to assemble a bunch of small donations from numerous donors over the Internet – a practice called “crowdfunding” that is already widely employed by nonprofits and artists.
Jeffrey Robbins, an entrepreneurial law expert at Messerli & Kramer, recently returned to the Twin Cities from the annual Securities Regulation Institute near San Diego.
Generally, SEC staff at the gathering will promote soon-to-be-released rules from the agency, Robbins said. Not so with crowdfunding, even though the 2012 Jumpstart Our Business Startups Act tasks the SEC with setting up mechanisms for businesses to raise up to $1 million annually from the practice.
For now the SEC is “reminding issuers that any offers or sales of securities purporting to rely on the crowdfunding exemption would be unlawful under the federal securities laws.”