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First Bytes: Muxtape, Apple, Palm   Facing Sanction, Comcast Threatens 2...
Aug 20 2008 3:27PM EDT

Michael Arrington: S.E.C. Cop?

Sam Gustin notes an interesting dust-up unfolding on TechCrunch.

A startup entrepreneur is in the hot seat after attempting to solicit angel investment via Twitter.

Earlier today, Jason Goldberg, the founder of SocialMedian, a social news network in private beta, sent out a Twitter message saying, "socialmedian is raising some more angel investment now. $25k - $100/investor, up to $500k. Interested parties can contact me directly."

Goldberg was promptly slapped down by TechCrunch's Michael Arrington  in a post acidly titled, "Social Median Disregards 60 Years of Securities Regulations With Sale of Stock on Twitter."

Writes Arrington: "Great way to get investors, right? Exactly not - the whole purpose of the Securities Act of 1933 is to prohibit public offerings like these unless accompanied by a registration statement and a valid prospectus approved by the Securities and Exchange Commission (the fun stuff is in Section 5). The Twitter also violates various state laws."

Under the glare of TechCrunch, Goldberg took the solicitation down, writing, "Deleted the tweet regarding investment. Wasn't worth the techrunch headache."

In the comments section of the TechCunch post, Goldberg added, "I took it on the chin on this one and prob deserve it.  I served it up to Mike and he smartly hit me for it."

Of course, the irony here is that Goldberg has just garnered himself a whole dollop of free publicity. Will it be enough to net him his $500,000?

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