In 1933, following the stock market crash of 1929, Congress passed the Securities Act (’33 Act). The ’33 Act was designed to regulate the sale of securities (e.g. stocks,) by requiring companies that want to sell securities in their company to follow specific disclosure requirements. Prior to the ‘33 Act, there was limited regulation of these types of transactions and consumers had little recourse if they were victims of fraudulent business practices. The ideal of protecting the average consumer in this way was certainly noble, but the results over the last 80 years may not have been what the lawmakers expected. 

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While the ‘33 Act did address the issue of disclosure by companies, it also created a system that prevented the average consumer from taking advantage of the wealth creation that business investments offer. Companies wanting to publicly solicit securities investments are required to file extensive disclosure documents regarding their business and the securities they’re offering. The idea being that these disclosure documents will protect consumers from fraudulent business practices. In reality, these requirements have made the cost of offering securities so expensive that companies can only afford to sell large amounts of securities to wealthy individuals and institutions. 

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Passed by the Minnesota legislature in 2015, the MNVest legislation provided an opportunity to break open this system, and now allows any consumer the right to benefit from investing in local Minnesota businesses.   

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Foremost Brewing Cooperative is taking advantage of this “democratization of investment” law by offering shares through Silicon Prairie Online.

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Source: MNvest legislation provides an opportunity for Minnesota consumers By Chris Hanson | 02/13/15, downloaded from https://www.minnpost.com/community-voices/2015/02/mnvest-legislation-provides-opportunity-minnesota-consumers, 6/18/18 

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