FINRA Shutters Crowdfunding Portal

The Financial Industry Regulatory Authority, the organization that regulates broker dealers and, now crowdfunding web portals, shut down UFP, LLC, known as UFundingPortal.com, because the portal:

  • lacked a reasonable basis for believing that certain companies offering securities through its online crowdfunding portal had complied with applicable regulatory requirements;
  • had reason to believe those companies or their offerings presented the potential for fraud or other investor protection concerns;
  • included on its website issuer communications that it knew or had reason to know contained untrue statements of material facts or were otherwise false or misleading; and
  • did not reasonably supervise the activities of its online crowdfunding portal.

Basically, the portal failed its due diligence obligations by allowing 16 companies to raise money on its site that clearly did not comply with the Securities and Exchange Commission’s Regulation Crowd Funding.

http://disciplinaryactions.finra.org/Search/ViewDocument/67004

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in accredited investor, Broker dealers, Crowd Fund Act, Crowd Fund Act of 2012, FINRA, fraud, Funding Portals, Investments, Jobs, Legislative Intent, penalty, review, SEC, Small Business, technology, VC, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.