According to the North American Securities Administrators Association (NASAA), the “blue sky” laws which allow states to oversee securities and brokers is a good thing (for their dues).
NASA, the National Aeronautics and Space Administration, and not to be confused with NASAA, said blue sky is merely a refraction of visible light through the atmosphere. NASA agreed blue sky is a very good thing as it allows people to breathe.
Now, NASAA is telling the world at large, “THE SKY IS FALLING!” Indeed, large chunks of the ether are plummeting downward at record speeds these days, threatening to take out the NASAA in a monster storm of fresh air.
NASAA points to a recent “analysis” of Internet domain names in the US and Canada. Among other things, this study found “nearly 8,800 domains with ‘crowdfunding’ in their name as of Nov. 30, up from fewer than 900 at the beginning of the year.”
Even more worrying to the confederacy of securities regulators, “2,000 (of the websites) contained content, more than 3,700 had no content and more than 3,000 appeared to be ‘parked’ and serving as placeholders to reserve a domain name for later use or sale.”
This clearly points to an impending collapse of the blue sky. Exactly how the NASAA will cope with this injection of fresh oxygen remains to be seen, but some privately speculate an increase in brain function which will allow the NASAA to become rational.
Why is the sky falling? The JOBS Act, at least according to the NASAA. The NASAA is reacting to the sharp increase in domain registration as if this is something entirely unique in the history of government, laws and market reaction to the government. “Of the domains with ‘crowdfunding’ in their name, about 6,800 have appeared since April 2012, when the JOBS Act was signed into law,” the NASAA report states.
DUCK! Here comes another breeze!
A quick look at the financial history of the markets in the United States shows any time the government does something to the marketplace, people react. Since JOBS is supposed to ease the rules on investing in small companies and crowdfunding will be an integral part of this, a sharp upswing in crowdfunding-named websites comes as a surprise only to the NASAA. By their reasoning, the blue sky is indeed falling because NASAA doesn’t understand the crowdfunding marketplace.
Anything that is not understood has to be bad, of course.
In a related matter, InvestmentNews reports “Crowd funding takes hit in Massachusetts” [sic]. Massachusetts, official slogan “We never met a tax we didn’t like and try to implement,” has filed charges against three out-of-state residents in two different companies. The state complains fraud was committed by the three people.
InvestmentNews, relying on the same logic that the NASAA uses when complaining about being clobbered by a breeze, says this is solid evidence crowdfunding is under attack in the Land of the Kennedys.
By the very definition, crowdfunding requires a crowd, not one or two people.