Fundraising on the world wild web not immune from ASIC
intervention.
Crowd funding is a practice in which people pool resources in
support of an organisation or event, usually via the internet, like
an online fundraising drive. While other jurisdictions like the
United States are modifying their laws to facilitate this practice,
Australian crowd funders should be wary.
ASIC has pointed out that some types of crowd funding will
involve advertising a financial product or an investment scheme
which would be illegal without compliance with the disclosure and
other requirements of the Corporations Act.
Websites supporting this activity may also be at risk.
Whilst this may seem heavy handed for what might be a fairly
minor activity, ASIC has expressed concern at the risk of fraud
where funds are raised without any ability of investors to manage
their risk by doing proper checks and ensuring the promoters are
clearly named and accountable.
