WASHINGTON, DC – Oregon’s Senator Jeff Merkley issued the following statement after Senate passage of his amendment to provide online funding for startup companies while instituting strong protections for investors:
“Crowdfunding has the potential to unleash a wave of new economic opportunity by letting small businesses and start-up companies use the Internet to harness the ‘wisdom of the crowd’ to fund new investments. Small businesses are our engines of job creation, so I am excited about this new marketplace and the potential for small businesses with great ideas to see breakthroughs in their ability to grow and create jobs.
“For this new investment market to thrive, however, investors must have confidence in provisions that block predatory practices. The House legislation lacked these provisions. By failing to require any information on companies and any accountability for the accuracy of information companies do provide, the House bill paved a path to pump and dump scams. This would have hurt our citizens and irreparably damaged crowdfunding markets from the outset. The Senate action today fixes that. It puts in place commonsense rules of the road that will prevent fraud and I look forward to continue working to help this new small business marketplace thrive. And I appreciate the advocacy of the on-line community that worked so closely with us to get it right.
“However, I voted against final passage today because the Senate did not address dangerous new loopholes in other sections of the bill. The overall package will allow companies to mislead investors, regulators and the public.”