Elio Crowdfunding

[Ekh]

In Reg. A+, who knows, but in any other dealings the SEC has, this would fall under manipulation of a security's price or volume:

Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock. They include: spreading false or misleading information about a company; improperly limiting the number of publicly-available shares; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. Those who engage in manipulation are subject to various civil and criminal sanctions.​

All documentation I can find in regards to Reg. A+, though, deals with the issuers or predatory buyers looking only to resell engaging in manipulative actions, versus fake investors manipulating the volume of an offering based on some grudge against the issuer. There may be additional details I haven't found, but this looks to me like another area of Reg. A+ that will need to be explored in depth using Elio as a case study.

This is the maiden voyage of the good ship Reg A+, and it's no surprise that the rigging needs to be tuned a bit. To extend the metaphor, the ship hit a squall in the form of phony investors. Murphy-proofing takes a while, but it's clear that both on the administrative side (better checking on potential investors and software ) and on the SEC side (clearer rules covering this kind of behavior, stringent penalties for offenders, including the possibility of civil suit by the issuing company).

It's a pity, but maybe a good thing for the system overall to flush out a few problems early on. If current bidding is all kosher, looks like we'll get to the 25 million before time runs out.

 

[Ekh]

In the SEC's own words they only have the resources to prosecute the most egregious violators of the rules. The big fish with big bank accounts who have committed massive fraud. Shaking Larry lunch bucket out of the tree will not pay the legal bill or the penalty.

You're making a good point. However, civil litigation, with the support of SEC regulators, might really discourage some of these creeps. Maybe one or two people in the Elio community have the skills to be cyber detectives. Quietly track even one or two of them down, then a subpoena delivered at midnight might just tell the trolls they should back off.

 

[Ekh]

How illegal would it be to show interest in something and then back out? There is no legal binding to this "interest gauge". What law would be broken?

Laws against stock manipulation. Financial terrorism? This is clearly an attempt to damage Elio Motors. I can't believe that at the least Elio can't sue the little creeps, IF they can be located.

 

[userexec]

How illegal would it be to show interest in something and then back out? There is no legal binding to this "interest gauge". What law would be broken?

Not illegal at all if the interest was less than 10% of your annual income.

 

[Ekh]

Counter hasn't budged in over an hour. Something's still out of whack.

9:37 moving again

 

[LillyMayPatterson #1685 & #5648]

Not illegal at all if the interest was less than 10% of your annual income.

I disagree. They are using sock puppets, fake names to manipulate the interest numbers. That's fraud. And destructive, mean spirited and it is done to damage another's property.

 

[Chris F]

just curious .... what would be required for the Securities and Exchange Commission to get involved .... somebody will have to push it .... what do you feel are the odds of that happening

The Commission can get involved if the staff see something suspicious happening in any act involving an offer or sale of securities. They do not have to wait for a complaint. Given the high profile of this deal, I would suspect they are keeping an eye on it.

 

[Chris F]

I disagree. They are using sock puppets, fake names to manipulate the interest numbers. That's fraud. And destructive, mean spirited and it is done to damage another's property.

I think the Commission could make a fraud case here, since the intention was to interfere in an interstate securities offering using false and misleading statements and material omissions. I.e., the trolls made expressions of interest under false names or other identifiers which they had no intention of honoring.

 

[Chris F]

Not illegal at all if the interest was less than 10% of your annual income.

That is incorrect. If it was done with fraudulent or malicious intent to interfere with the offering, it could be considered securities fraud.

 

[Ekh]

I think the Commission could make a fraud case here, since the intention was to interfere in an interstate securities offering using false and misleading statements and material omissions. I.e., the trolls made expressions of interest under false names or other identifiers which they had no intention of honoring.

They could, but they need to be motivated to do so. I doubt Elio will press it, because they absolutely need to be good little girls and boys until the SEC approves their campaign... and afterwards, too, because they ARE good citizens. I just hope EM is annoyed enough to hire a good investigator and slam these brats with civil suits -- while turning over any evidence to the SEC. And StartEngine should help pay for that, because they benefit from having lines made clear -- as well as from having their system beefed up.