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The point is not whether the investor can tell the difference between fraud and poor investment. It is rather whether an actual fraud was committed as determine
by maverick_iceman 10y ago
The point is not whether the investor can tell the difference between fraud and poor investment. It is rather whether an actual fraud was committed as determined by a court of law. Investors should do their due diligence anyway.
- tptacek 10y agoBut that's not how publicly traded companies work. In practice, it's difficult to go public without substantial revenue, and your numbers have to be audited and disclosed through SEC-approved processes. Combined, these two factors have the effect of keeping most outright scams out of the major markets. Equity crowdfunding eliminates both of those guardrails. So it's reasonable to ask how effective they'll be (at generating returns for retail investors) given the obvious issue of fraud (and incompetence).