Love and Money: An Affinity-Based Model for the Regulation of Capital Formation
Journal of Small and Emerging Business Law, Vol. 2, No. 1, 1998.
Posted: 1 Oct 1998
Date Written: Summer 1998
The article proposes that the price of exemption under the Securities Act of 1933 Rules 504 and 505 be made a legally enforceable stipulation that the promoters are assuming the strictest of fiduciary duties in relation to the formation, conduct, and dissolution of a business. These duties, which would be owed directly to each investor, would, among other things, provide important protections for those least likely to be alert to their own self-interest -- family and friends contemplating investment in small businesses.
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