Crowdfunding in Wonderland: Issuer and Investor Risks in Non-Fraudulent Creative Arts Campaigns Under the Jobs Act
29 Pages Posted: 26 Apr 2018 Last revised: 12 Jul 2018
Date Written: 2016
This article argues that the JOBS Act may ultimately open the doors to investors being attracted to, and artists being burdened by, the subjective appeal of artistic production, just as those elderly women (and Max) were seduced by the lights of Broadway in The Producers, and that these investors will have limited remedies, if any, against issuers of failed, yet non-fraudulent creative arts campaigns. For the SEC, this may be more than an occasional case of a savvy investor seeking redress for an artist's egregious underperformance. As equity crowdfunding grows in popularity, less sophisticated investors may flood the agency with subjective complaints that they were the victims of artistic underperformance, creating a system-wide problem that affects not only the disappointed investor who was looking for a bargain, but also the undervalued artist who performed competently and in good faith.
Keywords: JOBS Act, Creating Jobs, Investor Capital, Crowdfunding, SEC, Securities and Exchange Commission
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