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Crowdfunding

California Department of Corporations Provides Update Regarding Crowdfunding Activities. (Crowdfunding Update) The Department has released an update regarding the status of the law relating to “crowdfunding.” The new federal Jumpstart Our Business Startups (JOBS) Act exempts some small businesses and entrepreneurs from securities regulations in order to tap into the “crowd” in search of investments to finance their business ventures, but the practice is still regulated under existing law until the SEC issues final rules under the new law. The update explains some of the distinctions in use of the term “crowdfunding” for investment activities; the term “crowdfunding” is often used imprecisely and may or may not indicate a violation of the law.

The Department has posted an Investor Alert [Text Only Version] concerning the trend of “Crowdfunding” as a means of capital formation for small businesses. The Alert warns investors to approach crowdfunding investment opportunities with great caution. Crowdfunding is an Internet-based money-raising strategy that began as a way for the public to donate small amounts of money, often through social networking websites, to help artists, musicians, filmmakers and other creative people finance their projects. The new federal Jumpstart Our Business Startups (JOBS) Act, exempts some small businesses and entrepreneurs from securities regulations in order to tap into the “crowd” in search of investments to finance their business ventures, but the practice is still regulated until the SEC issues final rules under the new law. “Unfortunately, the potential for fraud is significant, so investors must be extremely cautious about crowdfunding opportunities,” said Jan Lynn Owen, Commissioner of the Department of Corporations.

See Media Release

 

Department featured on TIME WARNER CABLE TELEVISION “LOCAL EDITION”

The Department of Corporations will be featured on the Time Warner Cable “Local Edition” program.  Education & Outreach coordinator Jackie Wiley-Sistrunk discusses tips on how to avoid becoming a victim of financial scams, especially mortgage loan modification schemes. The brief interview will broadcast beginning December 15th in five Southern California Counties in the Time Warner Cable service area.

Jackie Wiley-Sistrunk was also honored in 2012 as a “Money Hero” by MONEY Magazine (a nationally circulated magazine affiliated with CNN). Jackie was honored for her work with the Seniors Against Investment Fraud (SAIF) program, and her years of service with the Education & Outreach unit of the Department to help assist Seniors and other vulnerable communities to avoid financial traps and investment fraud. Jackie’s feature may be viewed here: http://money.cnn.com/gallery/pf/2012/11/12/seniors-financial-security.moneymag/2.html.

California Agencies Issue Alert on Mortgage Loan Modification Scams.

The Department of Corporations, in conjunction with the Department of Real Estate, has posted a Consumer Alert warning homeowners of mortgage loan modification and home refinancing scams, including a reminder that offers that try to collect fees in advance are illegal. Alert is now available in Spanish.

National Mortgage Settlement

The California Attorney General has reached a loan-servicing and foreclosure settlement with five major banks. If you are a homeowner struggling to pay your mortgage or facing foreclosure, or if you have already lost your home to foreclosure, it is possible that this settlement could help you. Not every homeowner will qualify for relief under this settlement. Those who do qualify may receive various forms of relief depending on their individual circumstances. For information about the National Mortgage Settlement, please see the California Attorney General’s press release and FAQ document. The federal government also has a National Mortgage Settlement web site with additional details.

 

California Department of Corporations Advises SMALL BUSINESS caution with Crowdfunding opportunities

The Department has posted a Small Business Advisory concerning the trend of “Crowdfunding” as a means of capital formation for startups and small business expansion. The Advisory warns entrepreneurs to approach crowdfunding investment opportunities with great caution. Crowdfunding is an Internet-based money-raising strategy that began as a way for the public to donate small amounts of money, often through social networking websites, to help artists, musicians, filmmakers and other creative people finance their projects. The new federal Jumpstart Our Business Startups (JOBS) Act, exempts some small businesses and entrepreneurs from securities regulations in order to tap into the “crowd” in search of investments to finance their business ventures, but the practice is still regulated until the SEC issues final rules under the new law. “The potential for fraud and abuse is significant, so both entrepreneurs and investors must be extremely cautious when considering crowdfunding options,” said Jan Lynn Owen, Commissioner of the Department of Corporations.