Four weeks out from Regulation CF’s go-live date, and journalists, researchers, bloggers and anyone with access to the internet (including my cat) are asking small companies to comment on their plans to raise money under Regulation CF (“Title III”).
Please quit. Y’all are getting CrowdCheck’s clients into trouble.
For the third time in the last couple of days, I’ve seen an article or blog post in which a company that we are working with is asked to comment about their plans to raise money under Reg CF. These companies, being (a) super-enthused about crowdfunding and the ability to give their friends and fans the ability to share in any future success and (b) not having access to good securities law or compliance advice (till they came to us), are happy to tell the questioner that yes they intend to do crowdfunding and they are looking forward to letting the crowd share in the profits, and please invest!
And they aren’t allowed to do that. As we’ve pointed out again and again, under Regulation CF no company can say anything about their offering until they’ve filed with the SEC (and very little outside an intermediary’s site even then) and they can’t file till May 16. So until May 16, they can say diddly-squat (that’s a securities law term) about their plans. If they do, they run the risk of violating Section 5 of the Securities Act. And you don’t want to make them do that, right?