This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How the Government Let Us Down on Crowdfunding -- Today's Outrage

The crowdfunding investment intermediaries will also be responsible in providing disclosures to investors "related to risks and other investor education materials," according to rules that will be developed by the SEC. The portals will be required to make sure investors don't violate investment limits or hand money over to businesses raising funds until the aggregate target amount has been raised. Otherwise, investors' money must be returned.

Title III goes further in an effort to keep crowdfunding from becoming a free-for-all, by requiring that portals "not compensate promoters, finders, or lead generators for providing the broker or funding portal with the personal identifying information of any potential investor," and also by prohibiting "directors, officers or partners" of the portals from having financial interests in the businesses raising money.

"Democratization of Capitalism"

Barkats says the JOBS Act is a "game changer," as even the president and members of Congress "realize that creation of jobs and formation of capital cannot come from bureaucrats but from the bottom up." He calls the legalization of crowdfunding for equity and debt investments in the U.S. the "democratization of capitalism."

"It's insane that institutional investors have the right to participate in the growth of companies, while ordinary people are excluded. The JOBS Act creates a disintermediation between the so-called experts who brought us to a credit crunch and ordinary investors, allowing each and every of us to make a direct decision."

Barkats says medical-research companies provide a good example of how a revolutionary "combination of social media and investors" can benefit entrepreneurs, investors and the entire economy: "If you believe you are on the cusp of an innovative cure, you can solicit from anybody online, and not be held hostage by venture capital firms or Big Pharma, and not be held hostage by so-called non-profit organizations."

"The JOBS Act is a great step in the right direction," says Barkats, "but we need more 'doers' at the SEC than regulators. They are sitting on a great project that will allow our companies to compete with the rest of the world. Let the market be free and let people make their own decisions."

-- Written by Philip van Doorn in Jupiter, Fla.


>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs