Securities Law Issues Relating to Equity Investing Platforms

The Internet of Things has seen a recent eruption of online equity investing platforms. Names like AngelList, SeedInvest, FundersClub and CircleUp are becoming increasingly commonplace in the private equity world.  

This growth has been fueled in recent years by technological progress as well as the clarification from securities regulators, overhaul of existing securities registration exemptions, such as Rule 506, and the passage of new securities registration exemptions, such as Regulation Crowdfunding.

If you advise an online equity investing platform or are thinking about launching an online platform of your own, you need to be aware of the relevant federal and state securities laws. For example, depending on the securities registration exemption you intend to use, you may have to register the platform as a broker-dealer, a funding portal or an investment adviser, each of which involves ongoing compliance requirements.  

You will also have to be cognizant of the restrictions accompanying the different types of securities registration exemptions issuers will rely on when offering securities on the platform, from intrastate crowdfunding to Regulation A+.

Join attorneys Arina Shulga, founder of Shulga Law Firm PC, and Gary J. Ross, founder of Jackson Ross Law PLLC, as they break down the securities laws issues relating to equity investing platforms.

Learning Objectives: 

1. Identify current trends in online equity investing platforms and the major players
2. Appreciate the difference between establishing an online equity platform and other types of pooled investment vehicles, such as mutual funds, REITs or exchange-traded funds
3. Understand the broker-dealer and investment adviser models of equity investing platforms, including registration, compensation and compliance concerns
4. Discuss securities law exemptions available to online investment platforms, such as Rule 4(c) and the related SEC No-Action Letters
5. Navigate intermediary requirements under Regulation Crowdfunding, including registration, fraud prevention and communications with investors
6. Advise platforms on investment restrictions with respect to Regulation Crowdfunding, intrastate crowdfunding, and Regulation D and Regulation A+ offerings