The regulatory pressure is ramping up for crowdfunding portals. On May 4, 2022, FINRA fined two funding portals (Wefunder and StartEngine Capital) a combined $1.75 million for failing to comply with securities laws. Wefunder raised more than was allowed under crowdfunding rules, which it did by diverting the excess funds raised in one offering into a subsequent offering. StartEngine posted issuer communications on its funding portal that it suspected were false or misleading, and posted inaccurate counts of the number of investors on the platform. Check out FINRA’s detailed guidance on funding portals and crowdfunding offerings, which it published as part of its risk monitoring program.
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