Abstract Investment crowdfunding is a promising solution to the difficulties that small businesses, especially startups, have raising capital. But the capital formation gains promised by crowdfunding come at a cost. Crowdfunding exposes investors, including small, unsophisticated investors who...

On April 5, 2012, President Barack Obama signed into law a new federal securities law exemption for crowdfunded securities offerings. Crowdfunding — the use of the Internet to raise small amounts of money from a large number of contributors — has become incredibly popular outside the...

It is now legal to sell securities to the general public in unregistered, crowdfunded offerings. But offerings pursuant to the new federal crowdfunding exemption pose a serious risk of fraud. The buyers will be mostly small, unsophisticated investors, the issuers will be mostly small startups...

In Janus Capital, the Supreme Court held that a defendant “makes” a statement for purposes of Rule 10b-5(b) only if the defendant has “ultimate authority over the statement, including its content and whether and how to communicate it.” Other people involved in the drafting and...

The new federal crowdfunding exemption in section 4(a)(6) of the Securities Act requires that securities be sold only through regulated intermediaries — brokers and funding portals. Much of the information appearing on those crowdfunding intermediaries' platforms will be provided by someone...

The author examines whether exemptions for small businesses and small transactions that appear in many regulations are economically efficient. The cost of regulation has both variable and fixed components. As demonstrated by many empirical studies of regulatory compliance costs, the fixed costs...