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"Startup CEOs could lose everything. Speaking of lawyers, companies that take crowdfunding expose their officers to personal liabiilty; they can be sued for the
by vyrotek 15y ago
"Startup CEOs could lose everything. Speaking of lawyers, companies that take crowdfunding expose their officers to personal liabiilty; they can be sued for their personal assets. For this reason, many businesses won't open up crowdfunding rounds unless they absolutely have to. The overall quality of crowdfunding investments will be lower than it would have been otherwise."
This seems like a deal breaker to me. Does anyone have any specific insight to the details of this aspect?
- martingordon 15y agoThat scared me at first too so I did some research. The CNet article is wrong. It seems that the personal liability only applies to "material misrepresentations and omissions made to investors in connection with a crowdfunding offering". See http://financialservices.house.gov/News/DocumentSingle.aspx?DocumentID=285426 http://financialservices.house.gov/News/DocumentSingle.aspx?... (see General Anti-Fraud Provisions section) and http://www.dandodiary.com/2012/04/articles/regulatory-reform/the-impact-of-the-jobs-act-on-do-liability/ http://www.dandodiary.com/2012/04/articles/regulatory-reform... (search for above quote).