Ohio Shuts Down Crowdfunding Website SoMoLend

A Cease and Desist Was Order Against Crowdfunding Platform SoMoLend

Securities Lawyer 101 Blog

Since the JOBS Act became law, numerous crowdfunding websites have popped up on the internet.  This month, the first enforcement action was brought against a crowdfunding web-site.   The Ohio Division of Securities issued a notice of intent to issue a cease-and-desist order against a crowdfunding platform known as SoMoLend and its owner and Chief Executive Officer, Candace Klein.  Candace Klein is an advocate for crowdfunding who featured in well known media publications including Entrepreneur Magazine.

If issued, the order will force  SoMoLend to close its crowdfunding platform.

SoMoLend’s website reflects that it is a “debt-based funding platform” connecting small businesses wotj lenders.  According to the Ohio Division of Securities, SoMoLend’s business model is to post loan requests from businesses, sell the promissory notes issued by those businesses to investors, and service the repayment of the notes.

SoMoLend charges fees to issuer’s who offer the notes on their website.

The Ohio Division of Securities alleges that SoMoLend engaged in the unregistered sale of its own securities in violation of federal securities laws and the laws of the state of Ohio.  According to the Ohio Division of Securities, SoMoLend offered securities to investors using general solicitation and general advertising through the SoMoLend website.  Additionally, the allegations include that SoMoLend made false statements to investors and engaged in other fraudulent activity in connection with the sale of its securities.  These fraudulent statements allegedly include financial projections, SoMoLend’s performance, and relationships with banks.  Lastly, the allegations include that SoMoLend engaged in unregistered broker dealer activity by allowing business issuers to sell securities on its web-site in exchange for a fee.

Until the matter is resolved, SoMoLend has ceased making offers and sales of securities in Ohio on its web-site.  Shortly after the notice, Candace Klein resigned her position.

For further information about Direct Public Offerings, SEC registration statements and going public transactions, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 201 S, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.

This informational memorandum about Direct Public Offerings, SEC registration statements and going public transactions is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship.  For more information concerning the rules and regulations affecting the use of Rule 144, Form 8K, FINRA Rule 6490, Rule 506 private placement offerings, Regulation A, Rule 504 offerings, SEC reporting requirements, Securities Act registration on Form S-1 and S-8, Exchange Act registration on Form 10, Pink Sheet listing, OTCBB and OTCMarkets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, go public direct transactions and direct public offerings please contact Hamilton and Associates at (561) 416-8956, or by email a [email protected].  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 N
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855