Mitigating Fraud in Crowdfinance

This “Mitigating Fraud in Crowdfinance” Webinar was held on the 24th of September 2015 and was hosted by Dara Albright. This is an updated version of the presentation I gave in 2013 at the 2nd annual Crowdfund Investing Innovation Forum, organized by the Crowdfunding Professional Association which now includes investor aggregation, Joey Roth’s Charlatan, Martyr and Hustler matrix and my own Story, Team and Supporters venn diagram.

Comments received to date include …

  • “Sensational”
  • “Great Session!”
  • “Wonderful presentation. Full of useful information and very engaging – thank you!”
  • “So much great content. Really useful. Went by so quickly.”


Webinar viewers learnt how to identify red flags before deploying capital on equity crowdfunding or marketplace lending platforms as well as gain an understanding of “Investor Commanded Transparency”.

The Webinar was promoted as a MUST-VIEW webinar for novice investors, experienced venture investors (especially FinTech investors), financial advisors, issuers, underwriters and regulators.

In defining “Fraud I used the following as guidance:

  • untrue statement of a material fact
  • representation that the person making it knows is not true
  • doesn’t have the basis to make such a statement
  • to omit to state a material fact that is necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading

However it is also important to note that as a platform operator stopping Fraudsters is not our mission. Lessening the risk is a complementary outcome of a responsible Platform

When considering fraud mitigation for Investor Aggregation for Crowdfinance the process needs to encompass far more than just looking for “Bad Actors”.

Fraud mitigation needs to be orientated around the four areas in the picture below:
1) Building Investable Business Cases for funding including the people, IP and the entity
2) Aggregating and Nurturing Investors with complaint representations
3) Maintaining Compliance and Governance of the actual transactions and marketing materials
4) Regularly informing Stakeholders so they know how the business is going

, Mitigating Fraud in Crowdfinance