March 23, 2019

March 22, 2019

Subscribe to Latest Legal News and Analysis

March 21, 2019

Subscribe to Latest Legal News and Analysis

March 20, 2019

Subscribe to Latest Legal News and Analysis

Global Crowdfunding Site Consents to SEC Censure

Last week, the Securities and Exchange Commission censured Eureeca Capital SPC, an online, securities-based crowdfunding site incorporated in the Cayman Islands, for failing to implement procedures “reasonably designed” to prevent US citizens from accessing and investing in securities through its website. According to the SEC, the website allowed issuers to raise funds in exchange for equity, and hosted securities offerings from non-US companies. Visitors needed to register in order to invest and access certain types of information, but could access the names of offerings, the amount of offerings and informational videos without registering. Although the site had a disclaimer that the services were not being offered to US persons, the SEC found it to be inadequate because visitors who selected “United States” as their country were able to register, access offering materials and deposit funds for purposes of investing. Specifically, the SEC found that Eureeca accepted $20,000 from three US users in 2013 without taking reasonable steps to verify that they were accredited investors. The SEC found that Eureeca violated Sections 5(a) and 5(c) of the Securities Act of 1933 by failing to verify that the US investors were accredited investors, and also violated Section 15(a) of the Exchange Act of 1934 by acting as an unregistered broker-dealer to US users. Without admitting or denying the findings, Eureeca consented to cease and desist from further violations, pay a civil penalty of $25,000, and to a censure.   

In the Matter of Eureeca Capital SPC, File No. 3-16265, before the Securities and Exchange Commission.

©2019 Katten Muchin Rosenman LLP

TRENDING LEGAL ANALYSIS


About this Author

Michael S. Gordon, Katten Muchin Law Firm, Litigation Legal Specialist
Partner

Michael S. Gordon has a broad range of commercial litigation experience, and regularly represents clients in state and federal courts, as well as in arbitration and mediation proceedings, in New York, New Jersey and throughout the United States. Mr. Gordon has substantial experience in real estate and secured lending litigation, representing developers, management and hospitality companies, banks and private equity funds. Mr. Gordon also has extensive experience handling all types of business disputes including breach of contract, business torts, partnership and corporate shareholder...

212-940-6666
Associate

Margaret McQuade concentrates her practice on matters of employment law and executive compensation, with an emphasis on negotiating and drafting a wide range of agreements, and mediating and arbitrating claims on behalf of both employees and employers.

212-940-6664