FINRA issued an updated Investor Alert on crowdfunding rules and processes (see previous coverage). The Alert was updated to provide additional information on the SEC's new inflation-adjusted investment limits, which became effective on May 5, 2017.

In the Alert, FINRA encouraged investors to be aware:

  • that crowdfunding investments carry significant risks, since all or some of the investments can be lost;
  • of limitations on how much can be invested, which depends on investors' net worth and annual income;
  • that they will be limited in their ability to resell investments for the first year, and may need to hold investments for an indefinite period of time;
  • of required disclosures under the JOBS Act by crowdfunding companies, their broker-dealers and their funding portals; and
  • of the possibility of fraud.

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