The Deal: States Greet Crowdfunding With Hostility
They submitted numerous documents being used to sell securities to investors, which the person said are now being used against them.
Klein and SoMoLend did so to avoid the fate of Prosper Marketplace Inc. and Lending Club, two peer-to-peer lending companies that were shut down in Ohio in 2008. Both remain active in other states.
The person said Klein and SoMoLend directly asked Ohio regulators about how they could avoid the fate of Prosper Marketplace and Lending Club in the state, to no avail.
Brian Hoyt, a spokesman for the Ohio Division of Securities, declined to comment, citing the pending nature of the case.Charles Sidman, a retired professor at the University of Cincinnati and managing partner of venture capital fund ECS Capital Partners LLC, invested $10,000 in SoMoLend. He said that Ohio regulators have made themselves "a laughingstock" in the securities business. "They have a beef with
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