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2017 FINRA Annual Conference

FINRA's premier event—the Annual Conference provides the opportunity for practitioners, peers and regulators to exchange ideas on today's most timely compliance and regulatory topics. The conference offers industry professionals a variety of sessions related to current trends in technology, cybersecurity, risk management and much more.

Preparing for Reg CF: When do your financials go “stale”?

If you are about to launch a crowdfunding offering under Regulation CF, you should make sure you know when your financial statements will go “stale” (i.e., become too old).

Compliance with Reg CF: What if you need money during the middle of Reg CF campaign?

So far, Regulation Crowdfunding appears to be doing what it was always intended to do. Small businesses are able to raise funds to begin or expand their business operations. Some companies could be categorized as innovative growth companies, others more main street. In any case, a common theme is that issuers are in need of cash and see crowdfunding as a method that provides additional benefits over traditional loans or angel investment – if those options were even available to the issuer to begin with.

Preparing for an A+ grade: Don’t forget your state notice filings

One of the great benefits to issuers under the SEC’s rules for offerings under Tier 2 of Regulation A, effectively created by the JOBS Act, is the preemption of state requirements for registration of the offer and sale of securities. Known as “Blue Sky Laws”, these state specific rules added considerable cost to qualifying an offering under Regulation A.

Live Webinar: Title III, Regulation A+, and State Crowdfunding Regimes

“Crowdfunding” is an elastic term, covering general solicitation of accredited investors as well as equity investments in private companies available to all investors (Title III).  Private companies within certain size limits may be able sell shares to all investors under Regulation A+.  State crowdfunding laws may complicate the picture or afford more opportunities, or both.  We look at the range of “crowdfunding.”

Raising capital online? Check your bylaws

If you raise capital online, you're probably a New Economy, Internet 4.0 type of company, right? Leverage the cloud, move fast, break rules (not securities rules), create synergies, it's all about the hustle. Right?

Maybe. Some of you new era companies should be huddling in your hoodies for shame, 'cos some of you have distinctly old school bylaws when it somes to stock certificates.

CrowdCheck releases memo on Regulation CF communications by crowdfunding portals

Funding portals are governed by unique communication rules under Regulation CF and FINRA’s Funding Portal Rules. These rules derive from the restrictions on funding portals regarding soliciting investors and providing investment advice.

Communications and publicity by crowdfunding portals

Wed, 2016-11-16 11:50 -- Anonymous

An overview of the rules and regulations governing communications made by crowdfunding portals under the SEC's Regulation Crowdfunding and FINRA's Funding Portal Rules.

**CrowdCheck is not a law firm, the foregoing is not legal advice and it is subject to change as regulatory positions evolve. Please contact your lawyer with respect to any of the matters discussed here.

Compliance with Reg CF: Is your crowdfunding platform compliant?

Just as with issuer compliance, investment platform compliance with Regulation CF has been all over the map since Regulation CF went into effect in May. Under Rules 300 to 305 of Regulation CF, all intermediaries in Regulation CF offerings have specific requirements that they must meet. For instance, they must register with the SEC and FINRA, take measures to reduce the risk of fraud in transactions, provide educational materials to investors, and comply with process requirements for each offering.

SEC committee mulls broker-dealer regulations, perspectives on crowdfunding

CrowdCheck CEO Sara Hanks was quoted in The Hill's covereage of the recent SEC Advisory Committee on Small and Emerging Companies meeting. Sara Hanks is the Co-Chair of ACSEC.

Crowdfunding under the JOBS Act: New Avenues for Raising Capital and the Rules That Apply

CrowdCheck CEO Sara Hanks will be speaking at this event. This panel will also available by Webinar.



New Avenues for Raising Capital and the Rules That Apply

Presented By:

U.S. Securities and Exchange Commission – Salt Lake Regional Office

Utah Chapter of the Federal Bar Association

Preparing for an A+ grade: Ongoing reporting under Tier 2

On September 16, 2016, the SEC filed its first suspension of the Regulation A exemption against an issuer for failure to file its required annual statement. A suspension of the Regulation A exemption is a Bad Act, disqualifying the company from raising capital under Regulation A, Regulation CF, and Rule 506 of Regulation D.

Compliance with Reg CF: Current liquidity and capital resources

While never intended to be the type of discussion that accompanies the management’s discussion and analysis of a registered securities offering, the SEC expects issuers making offerings under Regulation CF to discuss all the material information regarding their current liquidity and capital resources. Under Rule 201(s), this discussion must cover each period for which the issuer has provided financial statements as well as identification of any material changes that have occurred after the end of the periods covered by the financial statements.

Jamie Ostrow, VP of Process

Jamie's Pic

Jamie Ostrow, Vice President of Process for CrowdCheck, has spent her career in both the U.S. and U.K. in distilling complex legal and financial concepts to a broad audience. She began her career as a pension actuary, consulting with human resource departments on a variety of employee benefit issues. As a corporate and securities attorney with the London office of Freshfields, Jamie advised on large IPOs and debt offerings. She also worked in a boutique law firm in New York on corporate governance, fund formation and capital raising issues.

Towards a proposed framework for crossborder regulation of crowdfunding offerings


We live in a world without borders.

Securities laws, however, have clearly-defined jurisdictional limits, many of them inconsistent across countries.

We live in a world where information wants to be free.

Compliance with Reg CF: Financial statements under Rule 201

The financial statements and corresponding discussion of financial condition of an issuer undertaking a securities offering under Regulation CF is arguably the most important set of information for an investor to make an informed investment decision. While the story of the company is critical for gaining investor interest, it is the financials that help an investor understand the potential for financial return. The financial statements and discussion are required disclosures under Rule 201 of Regulation CF.

Understanding Reg CF: Compliance with Rule 201 disclosure requirements

Over the next few weeks, CrowdCheck will be posting a series of blog posts regarding issuer compliance with the disclosure requirements of Regulation CF. We believe this series will be important for prospective issuers and platforms, and ultimately investors. Of the ninety-six Form C filings as of September 1, 2016, very few have actually met the disclosure requirements under Rule 201 of Regulation CF.

Startup Week Chattanooga

CrowdCheck VP of Product Management and Strategy, Andrew Stephenson, will host an event titled "Demystifying the world of crowdfunding and online capital raising" at the 2016 Startup Week Chattanooga. The session will cover the various forms of "crowdfunding" as capital raising options and how they can work for small and early stage companies. 

Ohio provides clarification on how its securities statutes relate to Reg CF

A few weeks ago, the State of Ohio was thrust into notoriety in the crowdfunding community because the state issued notices to Reg CF issuers organized in the state that they would be required to pay a notice filing fee for their offerings.

An Intern’s Thoughts on Crowdfunding and Compliance

*Our summer intern, Diana Leung, who will be heading to Georgetown University in the fall, weighs in on disclosure compliance.


Concurrent Online Offerings

Fri, 2016-08-05 14:47 -- Sara Hanks

This memo summarizes the rules and considerations of making concurrent offerings under various exemptions from registration under the Securities Act -- including Regulation A, Rule 506(c), Rule 506(b), Regulation CF, and the intrastate exemption.

For Investors, The Key to Crowdfunding Success is Due Diligence

Read CrowdCheck General Counsel Huiwen Leo's article featured on Locavesting!

Preparing for an A+ grade: What happens if I don’t use a broker?

Many small companies considering undertaking an offering under Tier 2 of Regulation A may find it advantageous to conduct their offering without the use of a registered broker-dealer. Perhaps they have a core base of supporters that would be interested in investing, or they have the ability to undertake their own online, and offline, marketing campaign to get investor interest.

Issuer-Dealer and Agent Registration Requirements for Issuers Not Utilizing a Registered Broker-Dealer for Offers and Sales of Securities under Tier 2 of Regulation A

Wed, 2016-07-20 08:54 -- Andrew Stephenson

This memo summarizes the requirements for registering as an issuer-dealer in those states in which issuer-dealer and agent registration is required for an offering of securities under Tier 2 of Regulation A without the use of a registered broker-dealer.

CrowdCheck releases comprehensive memo on Regulation CF communications

After extensive time spent reviewing the communication rules under Regulation CF and their interplay with other securities laws, as well as consulting with the SEC, CrowdCheck has released its comprehensive memo on communications and publicity by issuers prior to and during a Regulation CF offering.

Understanding Reg CF: Discussing financial results

As we have previously discussed, the Regulation CF disclosure requirement for the financial condition of the issuer has the potential to get inexperienced companies in trouble. It is in this section of the disclosure that optimistic entrepreneurs may provide misleading information by not providing the full details of performance measurements, or by not including information on the assumptions underlying any financial projections.

Understanding Reg CF: Know your advertising limits

Being in the crowdfunding space, my Twitter feed regularly fills up with “how-to” information on promoting crowdfunding campaigns, and who to hire for their experience running social media campaigns. While these outfits may know what they are doing when it comes to donation/rewards crowdfunding, much of what they offer is not compliant with Regulation CF.

Understanding Reg CF: even "certified" financial statements need to be in GAAP

With one week to go we are hearing that a number of companies are realizing their financial statements are not going to be reviewed in time by their accountants. But they really want to launch on May 16!

So they are planning to file on Form C for amounts less than $100,000 and "certifying" the financials, with a view to filing an amendment later.

Understanding Reg CF: Keeping your “backers” informed

One of the best practices that has developed in the realm of donation/reward crowdfunding is to provide regular updates to campaign backers over email in addition to publishing them on the crowdfunding platform. These updates are important — they keep backers informed about the status of the campaign, and provide information about company events relevant to the success of the idea. When it comes to Regulation CF, however, this practice can’t be adopted for equity backers (otherwise known as investors) in exactly the same manner as for donation/reward crowdfunding.

Preparing for an SEC filing? Don’t forget your CIK codes.

With all the work that surrounds preparing to file with the SEC (whether you are making a Regulation A or a Regulation CF filing) it can be easy to overlook one of the simplest things you need in order to file. A CIK code is your company’s distinct fingerprint on the SEC’s filing site EDGAR, and it will be the public number used to track your filings. You or a filing agent will need to use your CIK code to log into the EDGAR system from your first to final filing and any amendments and correspondence that come in between.

Journalists, bloggers, pundits and advisers: please stop making companies break the law!

Four weeks out from Regulation CF's go-live date, and journalists, researchers, bloggers and anyone with access to the internet (including my cat) are asking small companies to comment on their plans to raise money under Regulation CF ("Title III").

Please quit. Y'all are getting CrowdCheck's clients into trouble.

Understanding Reg CF: you need to get your financial statements reviewed NOW!

We're 4 weeks out from Regulation CF (Title III of the JOBS Act) going live. This is exciting, right? Are you going to be one of the first companies filing a Form C? If you haven't got your financial statements sorted out yet, you probably aren't.

Understanding Reg CF: Remember, don’t say anything until May 16

Regulation Crowdfunding becomes effective on May 16 of this year. What can you say now about your crowdfunding campaign that you plan to launch on May 16? Nothing. Not a word. Otherwise, you blow your exemption from registration and may no longer be eligible to use Reg CF.

CrowdCheck CEO Sara Hanks quoted in new US News Op-Ed

Innovation Needs Infrastructure

Economic infrastructure is key to the success of ride-sharing apps and crowdfunding efforts.

Understanding Reg CF: “Financial Condition of the Issuer”

In a rather innocuous requirement, the SEC requires that a company offering securities under Regulation Crowdfunding “describe [its] financial condition…” However, the short directive masks a rather tall order for companies. The discussion of the financial condition of the company will be one of the most analyzed parts of the Form C, both by prospective investors and by regulators. It is here that we are likely to see companies omitting material information in an effort to present an optimistic picture of the company, whether or not the intent was pernicious.

The Need for Uniform Reg A Tier 2 Filing Requirements

Since the SEC’s adoption of its Regulation A+ rules, creating two tiers of Reg A offerings and two sets of procedures to follow, CrowdCheck has worked with a few companies seeking to qualify offering under Reg A. These companies have found themselves to be guinea pigs for state regulators. In the case of Tier 1, it was working through the coordinated review process. In the case of Tier 2, it has been working with states to figure out what notice needs to be filed and when.

You get shares! and coupons! and a tax bill!

Hey, remember when Oprah gave away all those cars and all the lucky recipients got a car with accompanying tax bill? We could have something like that in crowdfunding too.

For companies seeking crowdfunding, it's natural that they will seek to market their offering to the people who love their product or service. And a company's crowd is going to be super-happy not just to get the shares, but also more of the company's product or service. A company producing zombie movies can give away tickets to the next premiere. A candy company can give away calorific goodies. is the resource for accredited investor verifications trusted by broker-dealers, law firms, companies, and investors who insist on safety and reliability.  We enable legally-compliant verifications for every type of accredited investor from anywhere in the world.

Reg CF: you cannot file incomplete documents

Oh, companies seeking crowdfunding under Regulation CF, it's going to be so tempting to do this. There'll be a time when you have all the information required by Rule 201 loaded on SuperPortal's site. All except the financial statements, which the accountant has not finished reviewing. She says her review isn't going to result in any material changes. And it's May 16, and you really want to be the first to go live on SuperPortal. What if you filed the Form C without the accountant's review? No-one would notice (the SEC doesn't officially review Form C filings), would they?

Preparing for an A+ grade: Whether Tier 1 or Tier 2, you will need audited financial statements

One seemingly critical difference between conducting a Regulation A offering under Tier 1 or Tier 2 at the federal level is the requirement to provide audited financial statements. The SEC does not require audited financial statements for Tier 1 offering, whereas audited financial statements are required for Tier 2. However, this difference is merely a red herring. Nearly every Tier 1 offering will require audited financial statements, because it is likely that at least one state in which the issuer intends to offer its securities requires audited financial statements.

CrowdCheck's comment letter on SEC proposals for Rule 147 and Rule 504

Preparing for an A+ grade: be prepared for a time commitment

Regulation A is a public offering of securities. Even though it is not a full blown IPO, it still takes a substantial amount of time to prepare and to have a successful offering. At CrowdCheck, we have been approached by a handful of companies that are excited about Regulation A and want to start selling to investors in a month. That’s great we say. We then ask, have you engaged an accountant? No. Do you know what you want to offer investors? No. Have you converted from an LLC to a C Corporation? No.

You get the idea.

Bloomberg BNA Securities Regulation & Law Report: SEC Adopts "Regulation Crowdfunding"

Written by CrowdCheck CEO Sara Hanks and published in Bloomberg BNA Securities Regulation & Law Report.

Post-qualification marketing materials in Regulation A offerings

OK, that has GOT to be the most boring title for one of the most exciting developments in the securities markets, right?

I've mentioned before that the SEC is taking a "free market disclosure" approach to Regulation A. In contrast to what happens in the context of an IPO, where you can only make very limited communications outside the prospectus, in Regulation A you can make "testing the waters" communications up to the time the SEC qualifies your offering.

CrowdCheck memo on final Crowdfunding rules

CrowdCheck has put together its definitive summary of Regulation Crowdfunding as adopted by the SEC. The memo can be found here,

The SEC needs positive feedback

Here's hoping that everyone in the crowdfunding community is planning to respond to the SEC's proposals on Rule 147 and 504. Even if they think the SEC got it right. And that they will comment on all aspects of the proposals, even the bits that the SEC got right.

CfPA Crowdfunding Summit 2015


The 2015 CfPA summit, leb by some of the most prominent figures in finance, FinTech, and securities governance, will focus on the outlook and opportunities for Crowdfinance in 2016. The conference is strategically structured to ensure that participants share knowledge and strategies while maximizing networking opportunities.

CF countdown: avoiding becoming a fully-registered company

This is my least favorite bit of the SEC's Regulation CF: the fact that the exemption from Section 12(g) is conditional.

What does this mean? Section 12(g) of the Securities Exchange Act of 1934 says that if you acquire a certain number of shareholders of any class of equity securities, you have to register that class with the SEC and become subject to the SEC's ongoing reporting requirements.

Regulation A BS shovelling: Rule 144

I had a few spare minutes yesterday after making our fifth Regulation A filing with the SEC and after a quick scamper round the internet I found that there is an amazing amount of bad information about Regulation A out there.

It's getting so deep we are going to have to start shovelling. So I'm going to start picking on bits of misinformation and shovelling them out.

We'll start with this one: "Non-affiliates can sell their shares after one year under SEC Rule 144."

MayDay is a fine time for a financial revolution

As we all know by now, the SEC on Friday voted in favor of adopting the regulations that will permit securities-based crowdfunding. The rules will go into full effect 180 days after publication in the Federal Register, which may mean just around May 1. Which seems like a very fine time for a fundamental change in the funding of early-stage companies.

The Current State of Reg A+ Investment Crowdfunding takes a look at the impact of Regulation A+ since it became available this past summer.

The Current State of Reg A+ Investment Crowdfunding


American businesses meet their working capital requirements by converting customers into investors using new equity crowdfunding laws enacted through the JOBS Act.

Preparing for an A+ grade: Regulation A and "material contracts"

We've discussed previously the fact that in a Regulation A offering the SEC gets to see all your stuff. Of course, it's not just the SEC who gets to see stuff, but anyone with an internet connection. And some of the stuff that they get to see in a Regulation A filing consists of your "material contracts." What are these?

Practical Law's Equity Crowdfunding Q&A w/Sara Hanks

Thomson Reuter's Practical Law interviews CrowdCheck CEO Sara Hanks 

on trends in equity crowdfunding and key issues for companies considering a crowdfunding offering.

The Securities and Exchange Commission Advisory Committee on Small and Emerging Companies Meeting

The Securities and Exchange Commission Advisory Committee on Small and Emerging Companies will meet on Spetember 21st, 2015. CrowdCheck CEO Sara Hanks is a member of the committee. 

Agenda and Info:


Big news for testing the waters under Tier 2 of Reg A+

Here at CrowdCheck, we have been worried about how state regulators would respond to the SEC's new testing the waters rules for Tier 2 Offerings under Regulation A.  As we previously addressed on this blog, the new rules exempted testing the waters communications from federal securities registration requirements, but left some ambiguity with respect to the application of "state notice" filings (which are permitted even in Tier 2 offerings).  After all, testing the waters communications are offers of

CrowdCheck comment on Washington State Tier 2 proposal

Crowdcheck submitted a comment letter today to Washington State's DFI with respect to its proposed notice filing requirements for Tier 2 of Regulation A.

Preparing for an A+ grade: We had a great testing the waters campaign, can we do Tier 1 offering under Regulation A?

Short answer, no. Long answer, maybe, but only after you wait for an extended period of time to ensure that no state would consider your testing the waters campaign to be integrated with your current offering.  Why is this important? At CrowdCheck, we have heard advice making the rounds that seems to forget that the states have retained their ability to regulate the registration of securities under Tier 1 offerings.  And states do take their registration requirements seriously.

Preparing for an A+ grade: Protect yourself

Don't fool yourself.  While an offering under Regulation A+ is not an IPO on a stock exchange or full registration under the Securities Act, it is a big deal.  Your company is preparing for a public offering of securities and will be taking on investors with whom you do not have any previous relationship.  Those investors may have different ideas about the future of your company than you do and may demonstrate those ideas in the form of a lawsuit.  That said, if Regulatio


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