The SEC entered into a settlement agreement with two promoters who launched a crowdfunding venture seeking to raise $300 million to buy a beer company. Crowdfunding utilizes social media sites to solicit and pool money from individuals who have a common interest and are willing to provide small investment contributions. The contributors were told that if the $300 million necessary for the beer company purchase was raised, the contributors would receive a "crowdsourced certificate of ownership," as well as a shipment of beer equal in value to the money invested. Although no monies were collected, the SEC alleged that the two promoters nonetheless violated the registration provisions of the Securities Act of 1933, as amended, by offering crowdsourced certificates of ownership without registering the offer with the SEC or having an exemption from registration available for the offer.
SEC Press Rel. 2011-122 (June 8, 2011)