Crowdfunding Scrutiny – Crowdfund Buzz

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crowdfunding scrutiny

Crowdfunding Scrutiny – Hooray for Hulu and Judy!

Crowdfunding scams have been around for years and more crowdfunding scrutiny can curtail a lot of crowdfunding crime, an emerging trend rising fast in terms of popularity among first-time and repeat criminals raking in cash. These scam artists are lured into breaking the law by easy money and big bucks and whether they know it or not, they break the law.  These scumbags come to mind.

Check out this Hulu show that premiered today.

Crowdfunding crime is real among first-time criminals and convicts and crowdfunding scrutiny is the cure. Bad actors either weave a believable story so they can pocket the cash of the unsuspecting or the victims are often unaware of who they get involved with and give their money to.  Either way, crowdfunding schemes are easier than ever to detect thanks to public records.

I used to think crowdfunding fraud was highly unlikely in the equity crowdfunding sector but revelations revealed to me over the past year proved me wrong. My education started with one of my associates –  Professor Irwin Stein, esquire. Ironically, while composing this article I discovered Mr. Stein’s latest piece which is spot on with the spirit of what I am saying right here and right now.

While every word he ever wrote or will ever write rings true, this quote in particular stood out to me:

The only way to reduce the presence of scam artists and scam offerings from the Reg. CF market is for the portal operators to push back against the idea that a portal can be passive when it comes to investor protection.

Bouncing off that quote there’s this which I also stumbled on while researching this article:

SEC takes legal action after crowdfunded marijuana investment scheme appears to go up in smoke

And the aftermath of the above…

crowdfunding scrutiny

Equity crowdfunding is rife with risk through scams as Professor Stein pointed out numerous times on his blog. Just as often, this kind of crowdfunding risk can be avoided with vigilant crowdfunding scrutiny; avoiding people with a documented record of financial failure, irresponsibility or outright criminal activity.

Professor Stein nailed it (yet again) when he said all of the platforms should step up and hold themselves to higher standards.  Until they do — if they ever do — crowdfunding backers need to take a page from investors and DYOR.

Do Your Own Research.  Start your research with Judy Records and check out the people involved in the company or the cause you want to invest in. Are you fine with what you find? If not, think twice before you give them your money.  As you have learned from me in this article, you never know who you might be dealing with.

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