Tag Archives: reasonable steps

SEC Permits Fall Back Verification Methods

The SEC has indicated that even if you cannot use one of the safe harbors under Rule 506(c) to verify that an investor is “accredited,” other evidence could be relied upon to do so under the “principles based” verification method. … Continue reading

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FINRA’s New Year’s Focus On Crowdfunding

FINRA released its new year’s analysis of risks that it will be focusing on in 2014 that relate to crowdfunding, including: cybersecurity, changes to Reg D permitting advertising, confirming accredited investor status, due diligence responsibilities, filings required in private placements, … Continue reading

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Crowdfunding Trust and Safety

Crowdfunding fraud can work in various ways. Kickstarter now has a “Trust and Safety Team” that reviews campaigns and responds to fraud complaints from donors. Many of the complaints focus on the failure to deliver rewards when promised. Delivery failure … Continue reading

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New SEC Crowdfunding Guidance

The SEC has released a number of Q&A’s regarding the use of new Rule 506(c). This guidance includes such matters as: whether an issuer who has taken reasonable steps to verify its investor is “accredited” and later finds out that … Continue reading

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New Crowdfunding Rules Sow Confusion

The Wall Street Journal is reporting today that, notwithstanding the SEC’s formal and informal guidance on using Rule 506(c), that permits advertising for private placements so long as all investors are “accredited,” there is general confusion about how to comply … Continue reading

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The Crowdfunding Floodgates Open

With the amendment to Reg D permitting companies to advertise to the public their private placements, Angel List has opened its doors and now has 1,360 companies on their open website asking for money. It also advertises investing “syndicates” led … Continue reading

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Open Season for Private Placement Ads Begins

The ban on advertising and generally soliciting investors for private placements ends today. Under the amendments to Rule 506, companies can now advertise online, in print and even on television. If done, they must then take reasonable steps to verify … Continue reading

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Crowdfunding Ad Avalanche to Begin Monday

Be prepared for an avalanche of crowdfunding advertising starting next Monday, September 23, 2013. As an example of what’s in store, the Wall Street Journal reported that Prodigy Networks, a Brazilian real estate developer, will be trying to raise $31 … Continue reading

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When You Can Advertise

As noted here previously, the SEC amended Rule 506 to permit an issuer to engage in general solicitation or general advertising in offering and selling securities pursuant to Rule 506, provided that all purchasers of the securities are accredited investors … Continue reading

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